Existing home sales rise to 5-month high

This is the type of information that shows we are either going throught the bottom of the market or it is at the point where things are going to start moving up.  Don't miss the right time to buy.

NEW YORK (CNNMoney.com) -- Sales of existing homes rose in July, according to the latest reading on the battered housing market by an industry trade group released Monday.

The National Association of Realtors reported that sales by homeowners in July increased to an annual pace of 5 million, up from the revised June reading of 4.85 million.

That's better than the annual pace of 4.9 million that economists surveyed by Briefing.com expected, and it's the highest pace since February. Still, July sales were down 13.2% from a year earlier.

Home sales were helped by falling prices. The median price of all single-family homes, townhomes, condominiums and co-ops sold during the month fell 7.1% to $212,400 from $228,600 a year ago. Before the start of the current housing slump, it had been 11 years since prices fell compared to a year earlier.

At the same time, the single-family home median price fell 7.7% from a year ago to $210,900. The trade group has tracked those sales prices going back to 1989.

"Home prices generally follow sales trends after a few months of lag time," said Lawrence Yun, NAR chief economist. "Still, inventory remains high in many parts of the country and will require time to fully absorb."

Even as sales picked, up, the excess supply of homes on the market still rose in July. Realtors estimated that there are now 4.67 million homes available for sale, which represents an 11.2 month supply.

That is up from the 11.1-month supply in June, though NAR said the rise in inventories was due to a sharp jump in the number of condominiums on the market. Inventory of single family homes declined slightly, falling to a 10.6 month supply from 11 months in June.

"We expect more balanced conditions in 2009, and will eventually return to normal long-term appreciation patterns," added Yun.

As a result of a battered market, President Bush signed the Housing and Economic Recovery Act late last month. The bill includes a temporary tax credit of up to $7,500 for first-time home buyers who haven't purchased a home in three years.

Qualified buyers must earn less than $75,000 - or $150,000 for a couple - after which point the tax credit begins to phase out. The Senate Finance Committee estimates that about 1.6 million people will use the credit.

"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," said NAR President Richard Gaylord. "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."