U.S. home resales unexpectedly fell in August, crimped by a shortage of inventory that is boosting home prices faster than the pace of wage growth.
The National Association of Realtors said on Thursday existing home sales declined 0.9% to an annual rate of 5.33 million units.
Economists polled by Reuters had forecast sales rising 1.1% in August to a 5.45 million-unit pace.
July’s sales pace was also revised lower to 5.38 million units from the previously reported 5.39 million units. However, despite sales being at their second-lowest pace of the year, home resales were still up 0.8% from one year ago.
The housing market has been strengthening on the back of healthy job gains. The unemployment rate has hovered around 5 percent since August last year and a tightening labor market has begun to push up wages, although not enough to keep up with home price growth.
“We go back to the same bottom line: lack of inventory choices and prices rising way too fast,” said Lawrence Yun, NAR’s chief economist.
Only the Northeast saw more sales in part, the NAR said, due to greater supply compared to the West, South and Midwest. First-time homebuyers made up 31% of existing home sales in August.
Earlier this week data showed U.S. housing starts fell more than expected in August but that was likely due to bad weather disrupting building activity in the South. By contrast, there was a solid increase in permits for single-family dwellings.
The number of unsold homes on the market fell 3.3% to 2.04 million in August from July. Inventories were down 10.1% compared to a year ago.
At August’s sales pace, it would take 4.6 months to clear the stock of houses on the market. A six-month supply is viewed as a healthy balance between supply and demand. One year ago it was 5.1 months.
With inventory tight, the median house price rose 5.1% from a year ago to $240,200 last month.