UPDATE 1-U.S. existing home sales jump 7.7 pct in August

* August existing sales beat expectations

* Home prices fall y/y, helping affordability

(Adds quote from economist)

WASHINGTON, Sept 21 (Reuters) - Existing home sales rose
more than expected in August to the fastest annual pace since
March as falling prices and low interest rates drew more buyers
into the market, the National Association of Realtors said.

Sales climbed 7.7 percent month over month to an annual
rate of 5.03 million units, the NAR said on Wednesday. The
median price was 5.1 percent lower than a year earlier.

Rising rents are also helping Americans decide to buy
homes, the NAR said.

"Favorable affordability conditions and rising rents are
underlying motivations," Lawrence Yun, chief NAR economist,
said in a statement.

Yun said the increase in sales came despite some
disruptions from Hurricane Irene, which battered much of the
East Coast at the end of the month.

Economists polled by Reuters had expected sales to rise 1.4
percent to a 4.71-million-unit pace. Compared to August 2010,
sales were 18.6 percent higher.
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Graphic - U.S. existing home sales:

r.reuters.com/fyn83s

Graphic - U.S. mortgages:

r.reuters.com/van83s
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The U.S. Federal Reserve is expected to hold interest rates
near zero following a two-day policy review that concludes on
Wednesday, and many expect policymakers will unveil new
measures to ease credit further. The Fed's policy has helped
keep mortgage rates historically low.

The NAR's estimate for the pace of existing home sales
during July was unchanged.
(Reporting by Jason Lange; Editing by James Dalgleish)
(jason.lange@thomsonreuters.com; Tel: +1 202 310 5487; Reuters
Messaging: jason.lange.reuters.com@reuters.net))