After a poor showing in June, existing-home sales resumed its slow climb in July, reporting a 2.3% improvement for the month to a seasonally adjusted annual rate of 4.47 million, according to data released today by the National Association of Realtors (NAR).

Despite the improvement, however, the monthly sales numbers were still the second lowest seen this year—a lackluster pace that Gary Painter, director of research at the USC Lusk Center for Real Estate, attributes to lagging job growth. "As long as the job market is not going gangbusters, you’re going to see a relatively slow recovery," he said.

Average and median prices were up 7.1% and 9.4%, respectively. July was the fifth consecutive month to log an annual improvement in pricing; however, the numbers are being influenced both by a decrease in distressed sales and constrained supply at the entry level. Distressed homes made up 24% of sales in July, compared to 29% the previous year.

And while "the total supply of housing inventory appears to be balanced in historic terms," said Lawrence Yun, chief economist at the NAR, "there are notable shortages in the lower price ranges which are limiting opportunities for first-time buyers." As a result, the association reported, first-time buyers made up 34% of purchases, compared to the 40% level the NAR considers normal.

The NAR does not provide data breakdowns of sales or inventory by price, making it difficult to ascertain all of the causes for low inventory levels; however, Painter’s speculation is that the trend is partially tied to the fact that, in many markets, a significant portion of entry-level homes have gone through the foreclosure process and have since been purchased by investors. "Investors are perfectly happy to rent those homes out because rents are so strong right now. They’re just waiting for prices to move up to a point where it makes it more attractive to put them back on the market."

See the NAR’s full release discussing July’s existing-home sales.

Claire Easley is a senior editor at Builder.