U.S home sales fell more than expected in June as a persistent shortage of properties pushed prices to a record high, suggesting the housing market was struggling to regain its footing since hitting a soft patch last year.

The U.S. National Association of Realtors said on Tuesday existing home sales dropped 1.7 percent to a seasonally adjusted annual rate of 5.27 million units last month. May's sales pace was revised higher to 5.36 million units from the previously reported 5.34 million units.

And the U.S. luxury property market is not doing well either. According to CCTV, in the first five months of 2018, half of the luxury properties with prices over 4 million U.S. dollars (about 27.52 million yuan) suffered a price reduction. 

This market weakening comes despite cheaper mortgage rates and the lowest unemployment rate in nearly 50 years.

Supply has continued to lag, especially in the lower-price segment of the housing market because of land and labor shortages, as well as expensive building materials. The U.S. government reported last week that permits for future home construction dropped to a two-year low in June.

Housing and manufacturing are the most weaken points in the economy. They are offsetting strong consumer spending, resulting in a slowdown in economic activity that, together with trade tensions and tepid global growth, could see the Federal Reserve cutting interest rates next Wednesday for the first time in a decade.

(With inputs from Reuters)