U.S. existing home sales are expected to have declined further in August. In the previous month, existing home sales dropped 3.2 percent and are likely to have dropped by around 2.1 percent in August, said Societe Generale in a research note.

The pending home sales index, which leads re-sales by a month or two, was up by 1.3 percent in July; however, typically indicates a better relationship with re-sales on a year-on-year basis. On that front, the pending index dropped 2.2 percent in July, following a 0.7 percent annual decline in June. Therefore, the existing home sales are expected to have dropped in August.

Still on a year-to-date basis, existing home sales have risen 3.6 percent as compared with the corresponding period to last year, noted Societe Generale. Much of the slow pace of gains reflects a lack of inventory on the market.

The months’ supply of single-family homes on the market might last around 4.7 months at the present sales rate, quite lower than the six months that most housing analysts consider to be indicative of a healthy balance, added Societe Generale.