Sales, Prices of Existing Homes Rise in July

Existing home sales climbed in July by the largest year-over-year margin since January 2006. Market growth and tightened inventory levels, especially in lower price brackets, also drove up home prices for the fifth consecutive month.

Sales of existing homes rose in July, despite a constricted inventory, and the national median price has increased year-over-year for five consecutive months, according to the National Association of Realtors

Total existing-home sales, which include single-family homes, townhomes, condominiums and co-ops, grew 2.3 percent to a seasonally adjusted annual rate of 4.47 million in July from 4.37 million in June. Sales are 10.4 percent above the 4.05 million-unit pace in July 2011, according to the August 22 report.

The national median existing-home price for all housing types was $187,300 in July, up 9.4 percent from a year ago. The July gain was the strongest since January 2006 when the median price rose 10.2 percent from a year earlier.

''Fewer sales in the lower price ranges are contributing to stronger increases in the median price, but all of the home price measures now are showing positive movement and that is building confidence in the market,'' said Lawrence Yun, NAR's chief economist. ''Furthermore, the higher median price naturally means more housing contribution to economic growth.''

Single-family home sales increased 2.1 percent to a seasonally adjusted annual rate of 3.98 million in July from 3.90 million in June, and are 9.9 percent above the 3.62 million-unit level in July 2011. The median existing single-family home price was $188,100 in July, up 9.6 percent from a year ago.

Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 24 percent of July sales (12 percent were foreclosures, 12 percent were short sales), down from 25 percent in June and 29 percent in July 2011. NAR is asking the government to expeditiously release the foreclosed properties it owns, to fill demand in inventory-constrained markets.

Total housing inventory at the end July increased 1.3 percent to 2.4 million existing homes available for sale, which represents a 6.4-month supply at the current sales pace, down from a 6.5-month supply in June. Listed inventory is 23.8 percent below a year ago, when there was a 9.3-month supply.

''The total supply of housing inventory appears to be balanced in historic terms, but there are notable shortages in the lower price ranges which are limiting opportunities for first-time buyers,'' Yun said.