(Bloomberg) -- Sales of previously owned U.S. homes fell in August, suggesting that demand is moderating as lean inventory and high prices squeezed out some buyers.

Contract closings decreased 2% from the prior month to an annualized 5.88 million, in line with economists’ estimates, figures from the National Association of Realtors showed Wednesday.

“Clearly the home sales are settling down but above pre-pandemic conditions,” Lawrence Yun, NAR’s chief economist, said on a call with reporters.

The decline suggests that a limited number of for-sale properties and surging prices are constraining demand even as financing costs remain historically low. The median selling price of an existing home rose 14.9% from a year ago to $356,700 in August, driven by more sales of higher-end properties.

The share of first-time buyers declined last month to 29%, the lowest since 2019 as high asking prices limited affordability.

There were 1.29 million homes for sale last month, down 13.4% from a year ago. At the current pace, it would take 2.6 months to sell all the homes on the market, compared with an average of about 4 months before the pandemic. 

Realtors see anything below five months of supply as a sign of a tight market. Yun said he expects an increase in inventory by yearend and into 2022.

Properties remained on the market for an average of 17 days last month, compared to 22 days a year ago. Eighty-seven percent of the homes sold in August were on the market for less than a month.

However, Yun said Realtors are seeing “less intensive multiple offers” for available properties. In August, there were 3.8 offers on a typical home, down from 4.5 a month earlier.

Digging Deeper

  • Sales of previously owned single-family homes decreased 1.9% last month to a 5.19 million pace
  • Existing condominium and co-op sales dropped 2.8% in August to 690,000
  • All four regions in the U.S. posted sales declines last month, led by a 3% drop in the South
  • Existing-home sales account for about 90% of U.S. housing and are calculated when a contract closes. New-home sales, which make up the remainder, are based on contract signings and will be released Friday

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