Sales of US homes crept down further in August, industry data showed Thursday, as supply remained limited while mortgage rates stayed high.
Sales of existing homes have cooled in the world's top economy as interest rates surged, pushing up costs for new buyers and making it less attractive for home owners to put their properties on sale after having locked in lower rates previously.
Existing home sales hit an annual rate of 4.04 million last month, seasonally adjusted, slipping 0.7 percent from July according to the National Association of Realtors (NAR).
The figure was lower than analysts expected and 15.3 percent below the same period a year ago.
"Mortgage rate changes will have a big impact over the short run, while job gains will have a steady, positive impact over the long run," said NAR chief economist Lawrence Yun.
But he noted that home prices continued climbing despite slower sales -- with the rate still hovering at the lowest levels since January.
"Supply needs to essentially double to moderate home price gains," Yun added in a statement.
The median price for an existing US home in August rose to $407,100 -- 3.9 percent higher than the same month last year.
Meanwhile, total housing inventory retreated from July's levels as well.
There is likely to be a "renewed drop in sales" ahead, following the latest decline in mortgage applications, economists Ian Shepherdson and Kieran Clancy of Pantheon Macroeconomics said in a note.
The economists added that they "see no definitive bottom yet in mortgage applications."
The popular 30-year fixed-rate mortgage averaged around 7.2 percent as of September 14, according to home loan finance company Freddie Mac.
A year ago, the level was six percent -- substantially higher than the 2.9% in September 2021.
Analysts expect lower sales will follow in the coming months.
"A real recovery cannot begin until mortgage rates fall substantially," said the Pantheon report.