The National Association of Realtors said Thursday that sales dropped 2.7 percent to a seasonally adjusted annual rate of 5.1 million in August, from a pace of 5.24 million in July. Sales had been expected to rise to an annual pace of 5.35 million, according to economists surveyed by Thomson Reuters.
"I'm befuddled by the numbers," said Patrick Newport, an economist at IHS Global Insight. He cautioned not to read too much into one month's numbers, and added, "There is strength in the market and we will see stronger sales through November when the tax credit (for first-time buyers) expires."
Lawrence Yun, the trade group's chief economist, said the drop may reflect delays in completing sales due to tough lending standards and new rules for appraisals.
"The buyers want to enter, but yet they are not closing," he said.
Nationwide sales are up nearly 14 percent from their bottom in January, but are still down nearly 30 percent from their peak nearly four years ago. For the housing market to stabilize, Yun said, sales would need to rise to a pace of around 5.5 million to 6 million per year.
If buyers see clear evidence of stable prices, the housing market recovery can be self-sustaining, Yun said, adding, "We are not there yet."
The median sales price was $177,700, down 12.5 percent from $203,200 in the same month last year.
In one positive sign, the inventory of unsold homes on the market fell to 3.6 million, from 4 million in July. That's an 8.5 month supply at the current sales pace, and the lowest level in more than two years.