Existing Home Sales Increased in July, Inventories Remain Tight

Strong consumer demand pushed sales of existing homes up 2.3% in July compared to the previous month, according to new figures compiled by the National Association of Realtors.

Housing inventory remains tight and even the supply of distressed homes has been declining, according to NAR chief economist Lawrence Yun. “Fully, one-third of homes purchased in July were on the market for less than a month,” Yun said.

There is currently a 6.4-month supply of homes for sale. The listed inventory is nearly 24% below the number of listed homes in July 2011.

The trade group reported that sales of existing single-family homes, condominiums and cooperatives rose to a 4.47 million seasonally adjusted annual rate in July from a 4.37 million rate in June. Sales in June fell 5.4% from May. Overall, sales are up 10% from a year ago.

On a nonseasonally adjusted basis, sales of previously owned homes fell 7.3% from June to a 429,000 annual rate in July, according to the NAR report.

Re/Max LLC reported Monday that existing home sales in the 53 metropolitan markets it tracks fell 10% from June to July.

Meanwhile, distressed sales comprised 24% of July sales with foreclosure transactions at 12% and short sales at 12%.

The NAR chief economist noted there is a shortage of homes in the lower-price ranges. “The low price ranges are popular with investors, so entry level buyers are at a disadvantage because many investors are making all-cash offers,” Yun said.