NEW YORK (CNN/Money) - Sales of existing homes fell in August despite low mortgage interest rates, bucking recent strength in that sector of the U.S. economy.

A report from the National Association of Realtors showed homes sold at an annual rate of 5.28 million in the month, down 1.3 percent from a revised 5.37 million in July. Analysts surveyed by Briefing.com had expected sales to rise to a 5.4 million rate in the month.

The sales rate still is strong by historical standards, just below the record 5.30 million sales rate set in 2001. The association expects a new sales record this year of about 5.44 million homes.

"For the rest of 2002, we're not expecting any big movements in the month-to-month sales pace, but we still expect above-normal rises in home prices due to a persistence of lean housing inventories on the market," said a statement from David Lereah, NAR's chief economist.

The median price for existing homes also continued to rise to $163,600, up nearly 1 percent from July and 6.4 percent from a year earlier. Median reflects the point at which half the homes sell for less than that amount and half sell for more.

Mortgage rates declined throughout much of the month, hitting what was then a 32-year low and making home purchase more affordable. The rate decline has continued throughout September to an average of 6.05 percent for a 30-year fixed mortgage, according to mortgage financier Freddie Mac.

"The drop in mortgage interest rates is offsetting higher home prices, so housing affordability conditions are remaining fairly even," said a statement from NAR President Martin Edwards Jr.