The National Association of Realtors reported Monday that existing-home sales increased 3.1% to a seasonally adjusted annual rate1 of 5 million units in July from a downwardly revised level of 4.85 million in June, 13.2% below the pace in July 2007.

Meantime, the national median existing-home price was down 7.1% from last July to $212,400. Total housing inventory at the end of July was up 3.9% to a record 4.67 million existing homes available for sale, an 11.2.-month supply, up from a 11.1-month supply in June. The inventory rise, however, was driven by a sharp increase in condo inventory; the single family supply declined 3.6% to a 10.6-month supply.

Single-family home sales rose 3.1% to a seasonally adjusted annual rate of4.39 million in July from 4.26 million in June, 12.4% below the 5.01 million-unit level a year ago. The median existing single-family home price was down slighly to $210,900 in July from $213,600 in June, down 7.7% from July 2007.

Existing condominium and co-op sales increased 3.4% to a seasonally adjusted annual rate of 610,000 units in July from 590,000 in June, 18.6% below July 2007. The median existing condo price was $223,400 in July, 2.7% below a year ago. The inventory of condos and coops jumped from 595,000 units in June to 769,000 units in July, a 15.1 month supply.

Regionally, sales in the West jumped 9.7% in July to 1.13 million, 0.9% percent higher than July 2007. The median price, however, was down 22.2% from last July to $273,200. The Northeast was up 5.9% to an annual pace of 900,000, but are 11.8% below a year ago, with the median price down 4.9% from July 2007 to $278,700. Midwest sales increased 0.9% to 1.12 million, off 17.0% from July 2007, with the median price up 1% to $175,400, up 1.0 percent from a year ago. The Southwas down 0.5% to an annual pace of 1.85 million, 18.1% below a year ago, with the median price down 3.5% to $179,300.

Said NAR chief economist Lawrence Yun, "Inventory remains high in many parts of the country and will require time to fully absorb." He added, "Sales have picked up significantly in several Florida and California markets, Home prices generally follow sales trends after a few months of lag time."

Still, Yun did not say how many months that would be, instead offering, "We expect more balanced conditions in 2009 and will eventually return to normal long-term appreciation patterns."

The numbers were slightly above what Wall Street was expecting but did not impress analysts. Carl Reichardt at Wachovia Securities put out a note stating, "Total existing home sales pace has been running in a narrow band between 4.85 million and 5.11 million for 11 consecutive months, suggesting to us that sales are somewhere close to a bottom." However, he noted, "We expect listings to continue to escalate this year, adding further pressure to both the existing and new home markets."

Michael Rehaut of J.P. Morgan said in a investor note, "We continue to believe elevated inventory levels remain a core structural issue for the housing market, which we believe should result in further price declines and large impairment charges for the builders over at least the next few quarters."