- Gregory Daco, head of U.S. macroeconomics
US home resales dropped more than predicted in August, marking the first decline in four months, with higher home prices putting off buyers. Sales of previously owned homes plunged 4.8% last month to a 5.31 million seasonally adjusted annual rate, the National Association of Realtors reported. Economists, however, had projected sales to decline 1.1% to a seasonally adjusted annual rate of 5.53 million. Sales of single-family homes tumbled 5.3% in August, while sales of condominiums and co-ops dropped 1.6%. The decrease might be due to rising prices putting off potential buyers. The median home price hit $228,700 in August. That was up 4.7% from a year earlier, but left the annual rate at its lowest level since August 2014.
Sales had reached a post-recession peak in July, supported by low mortgage rates and a steady influx of new jobs. Over the past 12 months, sales have surged 6.2% and experts believe demand will remain robust well into 2016 even though interest rates are expected to climb. A slew of positive reports on the US housing market have reinforced the view that the nation's economy is gathering steam and closing in on the point when the Fed will raise interest rates to keep it from overheating.
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