WASHINGTON — U.S. home sales slid in August by the most since January as tight supplies and rising prices discouraged potential buyers.
The National Association of Realtors said Monday that sales of existing homes fell 4.8 percent from the previous month to a seasonally adjusted annual rate of 5.31 million, the lowest level since April. That's down from 5.58 million in July, which was the highest in more than eight years.
Solid job growth and low mortgage rates have boosted sales 6.2 percent in the past year. But the median home price has increased 4.7 percent during that time, more than double the increase in average hourly pay. That is likely pushing more homes out of reach for many buyers.
Sales will likely remain flat for much of the rest of the year, according to the Realtors' group and some private economists. The NAR forecasts sales will be 5.3 million this year, the most since the recession.
There were signs of fundamental improvement in the housing market. First-time homebuyers, a critical source of demand, made up 32 percent of sales last month, up from 28 percent in July. That is still below historical averages of nearly 40 percent. And foreclosures and short sales — where the seller owes more than the house is worth — fell to the lowest level in nearly seven years.
"Given stronger job growth, and low rates that are going to be sticking around for at least a little while longer, the U.S. housing market is still in good shape," Jennifer Lee, an economist at BMO Capital Markets.