WASHINGTON—Sales of previously owned homes slipped in July, a sign the U.S. housing-market recovery could be uneven as limited inventory and rising prices put purchases out of reach for some Americans.

The pace of existing home sales decreased 3.2% last month from June to a seasonally adjusted rate of 5.39 million, the National Association of Realtors said Wednesday. It was the first time sales had decreased since February.

Economists surveyed by The Wall Street Journal had expected a July sales pace of 5.52 million. Sales for June were unrevised at 5.57 million, the best pace of the expansion.

From a year earlier, July sales were down 1.6%.

The data suggests rapidly rising prices and limited inventory is cooling sales.

"Prices are rising, and it's clearly due to a lack of inventory," said Realtors economist Lawrence Yun. "There is plenty of demand," he said, but buyers can't find properties in their price range.

News Corp, owner of The Wall Street Journal, also owns Move Inc., which operates a website and mobile products for the National Association of Realtors.

The median price of an existing home sold in July was $244,100, up 5.3% from a year earlier. That is rising much faster than overall inflation and wage growth.

Wednesday's report showed it would take 4.7 months to exhaust the supply of existing homes on the market at the end of July. Supply has fallen from a year earlier for 14 straight months. Total housing inventory at the end of July decreased 5.8% from a year ago to 2.13 million.

The share of first-time buyers was 32% in July, down slightly from June.

The latest figures indicate the housing market could be challenged to repeat the strong first half of 2016. Historically low mortgage interest rates, improving income growth and steady job creation have supported buying of both new and existing homes.

The average rate for a 30-year fixed rate mortgage was 3.48% at the end of July, down a half-percentage point from a year earlier, according to Freddie Mac.

So far this year, existing home sales are trending near the pace recorded just before the recession began. Still, the pace is well below the peak reached in 2005 when more than 7 million properties were sold.

The Commerce Department said Tuesday that new homes, just 10% of the market, sold at the best pace since 2007 in July. But that same report showed availability of new homes was at a three-year low. And in some markets, with especially low unemployment, inventory is even tighter.

If builders are unable to increase supply, prices of existing homes will rise and that could slow demand because some would-be buyers will remain in the rental market.

"Home-price growth is outpacing rent growth," Mr. Yun said. "Which makes it difficult for renters to convert to buyers."

Write to Eric Morath at eric.morath@wsj.com and Ben Leubsdorf at ben.leubsdorf@wsj.com

 

(END) Dow Jones Newswires

August 24, 2016 10:35 ET (14:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
News (ASX:NWS)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more News Charts.
News (ASX:NWS)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more News Charts.