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U.S. existing home sales come in flat in August, likely to grow modestly in coming months

U.S. existing home sales came in flat in August after falling for four months. Existing home sales came in at 5.34 million units. The August outturn came in below expectations of a mild rise of 0.4 percent, with resale activity at the lowest level since February 2016. Single and multi-family homes sales stayed the same on month at 4.75 million and 0.59 million, respectively.

Region wise, activity rebounded in Northeast and Midwest; however, the gains recorded in those regions were countered by falls seen in the South and the West region.

The number of homes available for sale stayed the same sequentially; however, it rose 2.6 percent year-on-year, marking the first year-on-year rise since 2015. Homes typically remained on the market for 29 days – up from 27 days in July but down slightly from 30 days from a year ago. Median price growth accelerated to 4.6 percent year-on-year from 4.3 percent in the month prior, but still slightly below the near 6 percent pace at the beginning of the year.

The outlook appears murky with builder bumping up against capacity constraints, such as shortages of workers and buildable lots, and higher material prices, noted TD Economics in a research report. This implies that in spite of the strong demand, homebuilders might not be able to increase activity substantially in the coming months. The data, in the near-term, might become harder to read in months ahead as the effect of Hurricane Florence feeds through, with the storm impacting sales in the region.

“Looking beyond these temporary impacts, existing home sales will likely advance at a modest pace at best, held up by slow construction and falling affordability as mortgage rates and prices continue to rise”, added TD Economics.

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -135.883. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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