Update: Existing Home Sales Fall 2.7% - TheStreet

Updated from 10:47 a.m. EDT

After

surging in August, the sale of previously owned homes slipped in September, the

National Association of Realtors

said Wednesday.

Existing home sales

, which account for the bulk of U.S. housing market activity, fell 2.7% in September to an annual rate of 5.14 million units. This compares with a revised annual pace of 5.28 million units in August.

The figure matched the consensus estimate among economists polled by

Reuters

.

September's sales activity was 0.2% below the 5.15 million unit pace in September 1999.

David Lereah, the National Association of Realtors' chief economist, said the slight easing was to be expected, given that home sales activity rose a surprisingly strong 9.5% from July to August.

"What we saw in August was a lot of families jumping into the market to take advantage of favorable conditions," he said in a statement. "The August surge resulted from the unique combination of a sustained decline in interest rates, pent-up demand from inventory shortages earlier in the year, and the pressure to close the transaction before the start of the school year."

According to

Freddie Mac

, the government mortgage lender, the national average for 30-year mortgages was 7.91% in September, compared with 8.03% in August and 7.82% in September of 1999. Rates have eased back since reaching 8.53% in May.

"Housing affordability has fallen in the last year because of slowing job and income growth and higher mortgage rates," said Karen Dexter, an economist at

Merrill Lynch

, noting that while mortgage rates have fallen in recent months, they are still about 1.3% above what they were in the spring of 1999. "We expect housing activity to trend modestly lower as job and income growth continue to moderate and mortgage rates remain around current levels."

Regionally, home resales in the West rose 2.1% in September to an annual rate of 1.47 million units. In the Midwest and the South, existing home sales fell 3.5%, while the Northeast posted the largest drop, falling 8.8% in August to a pace of 620,000 units.

The national median existing-home price was $141,800 in September, up 5.5% from September of 1999 when the median price was $134,400.

Housing inventory levels rose 1.8% at the end of September with 1.72 million existing homes available for sale, which represents a four month supply at the current sales pace. Inventory levels remain 12.7% below the 1.97 million homes available in September 1999.