The National Association of Realtors are scratching their collective heads after releasing Existing Home Sales report for August, which came in decidedly below consensus.

Wall Street was looking for +0.3%, instead, we saw -1.7%, extending the downward sequential bias since March.  The NAR explained how all the good stuff is being mitigated by serious headwinds.

Positives:

• Steady employment gains
• Slowly rising wages
• Lower mortgage rates

The headwinds:

• Supply
• Prices

Yes, the old supply and demand dynamics continues to foil the housing market.   Supply was down to 1.88 million, a decline of 2.1% from July, and 6.5% from a year ago.  The corresponding problem is prices climbed to $253,500 or 5.6% higher than a year ago. Note: year over year existing home prices have climbed for 66 straight months.

The headline belies the notion the economy is firing on all cylinders, expect folks are paying those higher prices.  So, now we wait for the Fed.

Let’s stay on the sidelines for the remainder of the session.