(Adds economists’ quotes) Aug 23 (Reuters) - U.S. existing home sales increased for the second consecutive month in July as inventories improved moderately, while prices eased from the prior month’s record level. Existing home sales increased 2.0% to a seasonally adjusted annual rate of 5.99 million units last month from June’s upwardly revised pace of 5.87 million units, the National Association of Realtors said on Monday. Sales were unchanged in the Northeast, but increased in the Midwest, South and the West. Economists polled by Reuters had forecast sales would decline to a rate of 5.83 million units in July. Home resales, which account for the bulk of U.S. home sales, increased 1.5% on a year-on-year basis. The median sales price slipped to $359,900 from June’s record level, but was still up 17.8% from the year-earlier period. The sales rate increase suggests the drop-off in sales after a sharp run-up late in 2020 and early this year may have run its course. “We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” Lawrence Yun, NAR’s chief economist, said in a statement. “Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.” Homebuilding fell more than expected in July amid supply constraints, the Commerce Department reported last week, as surging construction costs and home prices continued to constrain the housing market. There was, however, a rebound in building permits following three consecutive monthly declines. Demand for housing soared throughout the coronavirus pandemic. Since then, the combination of robust demand and record-low mortgage rates has far outpaced supply. This has also made it harder for potential homebuyers to enter the market. For example, a report from the Mortgage Bankers Association last week showed that applications for loans to purchase a house declined in the week ending Aug. 13. “Going forward, the market for existing homes will be supported by strong demand and mortgage rates that remain relatively low,” said Nancy Vanden Houten, lead economist at Oxford Economics in New York. “However, inventory remains lean despite the increase in July, and that will keep a floor under home prices, which are unaffordable for many prospective buyers.” Data on new home sales for July are due on Tuesday. Sales are forecast to rise to a seasonally adjusted annual rate of 700,000 units, according to a survey of economists polled by Reuters, after hitting a 14-month low in June. “Continued economic recovery is key to maintaining sales momentum,” said Danielle Hale, chief economist at Realtor.com. “Anything that disrupts progress, such as rising COVID cases, could knock home sales off course.” (Reporting by Evan Sully; Editing by Dan Burns and Paul Simao) Our Standards: The Thomson Reuters Trust Principles.