Existing-home sales were up from June to July, but more importantly, housing inventory and distressed property sales continue to stabilize.

By Peter Ricci

Existing-home sales reversed recent declines in July, rising 2.3 percent from June and 10.4 percent from July  2011, according to the National Association of Realtors.

Median existing-home price was equally optimistic for the month, increasing yearly for the fifth consecutive month to $187,300, a 9.4 percent jump that’s the strong year-over-year increase since January 2006, when median price rose 10.2 percent.

Existing-Home Sales and Housing Inventory Months Supply

Anyone who follows our site knows, though, that the housing inventory numbers were what we were really anticipating, and they didn’t disappoint: total housing inventory in July increased by 1.3 percent to 2.40 million existing homes for sale, but overall housing inventory still declined from a 6.5 months supply in June to a 6.4 months supply in July. Housing inventory has fallen 23.8 percent from last July, when it was at 9.3 months supply. As we’ve written before, this is a good thing – lower housing inventory means housings fundamentals are slowly getting back to normal, and the sooner that happens, the sooner new construction can return.

Distressed Property Sales & Other Assorted Housing Statistics

As always, NAR’s report was a treasure trove of housing statistics. Here’s some of the other valuable data:

• Distressed property sales were 24 percent of July sales (12 percent foreclosures, 12 percent short sales), down from 25 percent in June and 29 percent in July 2011; the lower that percentage gets, the better for new construction properties.
• The average discount on foreclosure sales was 17 percent, and for short sales, 15 percent.
• First-time homebuyers accounted for 34 percent of purchasers in July, up from 32 percent in June; the normal percentage for first-timers is around 40 percent.
• Single-family home sales were up 2.1 percent from June to July, and 9.9 percent from July 2011; condo and co-op sales, meanwhile, rose 4.3 percent monthly and 14.0 percent yearly.
• Finally, existing-home sales varied regionally, increasing in both the Midwest and South by respective monthly totals of 2.0 percent and 2.3 percent, and yearly by 16.9 percent and 8.6 percent. Median price for the regions was also up from last year by 5.8 and 6.6 percent.

Lawrence Yun, NAR’s chief economist, said a number of factors contributed to July’s strong existing-home sales numbers.

“Mortgage interest rates have been at record lows this year while rents have been rising at faster rates,” he said. “Combined, these factors are helping to unleash a pent-up demand.”