Existing Home Sales See Steeper-than-Expected Drop in August

U.S. home resales fell more than expected in August, a cautionary sign for the U.S. housing market which has recently looked on stronger footing.

The National Association of Realtors said on Monday existing home sales dropped 4.8 percent to an annual rate of 5.31 million units.

Economists polled by Reuters had forecast a 5.51 million-unit pace of home sales last month. Sales were up 6.2 percent from a year ago.

The decline in August might be due to rising prices shutting out potential buyers, said Lawrence Yun, the NAR's chief economist. Home sales fell most in America's South and West, areas which had recently seen the fastest price gains, he said.

Nationwide, the median home price fell slightly in August to $228,700. That was still up 4.7 percent from a year earlier, but left the year-over-year rate at its lowest since August 2014. Prices in the West were up 7.1 percent from a year earlier.

July's sales pace was revised slightly lower to 5.58 million units.

A string of strong reports on the U.S. housing market have supported the view that the U.S. economy is building up steam and closing in on the point when the Federal Reserve will hike interest rates to keep it from overheating.

The housing market has been adding to quarterly economic growth although home sales and construction remain far below levels seen in the years before the 2007-09 recession. (Reporting by Jason Lange; Editing by Andrea Ricci)