Largest drop in months for U.S. home sales

U.S. home sales fell in September by the most in over two years as the housing market continued to struggle despite strength across the broader economy.

Figures released Friday by the National Association of Realtors (NAR) showed existing home sales dropped 3.4% to a seasonally-adjusted annual rate of 5.15 million units last month.

Home sales south of the border have now fallen for six straight months. A lack of properties for sale has pushed up prices, sidelining many would-be homeowners.

NAR Chief Economist Lawrence Yun said the overall decline appeared related to a rise in interest rates. Officials also said supply has been constrained by rising building material costs as well as land and labour shortages, while rising mortgage rates are expected to slow demand.

NAR said there were 1.88 million homes on the market in September, an increase of 1.1% from a year ago.

At September’s sales pace, it would take 4.4 months to clear the current inventory. A supply of six to seven months is viewed as a healthy balance between supply and demand.