The National Association of Realtors reported Monday (August 27) that July existing-home sales fell 0.2% to a seasonally adjusted annual rate of 5.75 million units from an upwardly revised pace of 5.76 million in June. That is 9.0% below July 2006's 6.32 million.

However, the NAR reported that inventory of unsold homes rose 5.1 percent to 4.59 million, a 9.6-month supply, up from 9.1 months in June and the highest level recorded by the realtor group since the housing downturn of 1990.

The July sales figures also represent closings before the mortgage crisis in the financial markets took place in early August. The NAR estimates that approximately 5% to 7% of the existing homes for sale are the result of foreclosures, which are expected to rise as adjustable rate mortgages reset in coming months on 2005 and 2006 vintage mortgages, many of which were no-documentation, no-down-payment loans.

Still, Lawrence Yun, the NAR's senior economist, took a positive view of the July numbers. "Home sales probably would be rising in the absence of the mortgage liquidity issues of the past two months," he said in a prepared statement. "Some buyers with contracts have been scrambling when loan commitments did not materialize at the last moment, while other potential buyers are simply waiting for the mortgage market to stabilize."

The national median existing-home price for all housing types was $228,900 in July, down 0.6% from July 2006's $230,200, which was the peak price on record.

Single-family sales dropped 0.4% to a seasonally adjusted annual rate of 5.00 million in July from an upwardly revised level of 5.02 million in June, 9.3% below the year-ago pace of 5.51 million units. The median existing single-family home price fell 1% from last July to $228,600 in July.

Existing condominium and co-op sales rose 1.4% to a seasonally adjusted annual rate of 750,000 units in July from 740,000 in June, 7.5% below July 2006. The median existing condo price was $230,600 in July, up 2.4% from a year ago.

Regionally, existing-home sales in the West rose 1.8% to 1.12 million, 15.2% below a year ago, with the median price up 0.9% to $349,400; sales were up 1% in the Northeast to 1.02 million, 2.9% below last July, with prices up 5.9% to $290,900; the South was flat at 2.26 million, 10.7% below last year's pace at prices that are down 3.2% to $186,300; and sales in the Midwest fell 2.2% to 1.35 million, 5.6% below July 2006, with the media price off 1.8% to $173,800.

The NAR's Yun came close to spotting a bottom, at least in the Northeast. "The rise in sales and prices in the Northeast region on a fairly consistent basis in recent months is promising because this was the first region that underwent sales and price weakness after the boom," he said. "Now, it appears that it will be the first region to climb back, indicating that other regions could follow a similar path."