Existing-home sales rose in July to the highest level in five months, beating expectations, but are still anything but robust.


Existing-home sales increased 3.1 percent to a seasonally adjusted annual rate of 5 million units in July from a downwardly revised level of 4.85 million in June, reported the National Association of Realtors.

Sales had been expected to rise by only 1.6 percent, according to economists surveyed by Thomson/IFR.

Sales are still 13.2 percent lower than the 5.76 million unit pace in July 2007, says the association, which notes sales have hovered in a relatively narrow range over the past 11 months.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the up-and-down pattern may break soon.

"We hope the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead," he said. "Buyers who've been on the sidelines should take a closer look at what's available to them now in terms of financing and incentives. Given some of the inventory on the market, we also strongly encourage buyers to get a professional home inspection."

Lawrence Yun, NAR chief economist, said home prices in some regions could soon increase. "Sales have picked up significantly in several Florida and California markets. Home prices generally follow sales trends after a few months of lag time," he said. "Still, inventory remains high in many parts of the country and will require time to fully absorb. We expect more balanced conditions in 2009 and will eventually return to normal long-term appreciation patterns."