Sales of Existing Homes which include ingle-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate1 of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.

This was the fourth consecutive month of increase. The last time sales rose for four straight months was in June 2004 and the last time sales were higher than a year earlier was November 2005, the Realtors group said.

The monthly gain was the largest on record for existing-home sales since 1999. Lawrence Yun, NAR chief economist, is encouraged by this development and said “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales.”

“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.

Regionally, the strongest market was the Northeast, where sales surged 13.4 percent to an annual rate of 930,000 and was 3.3 percent above last July. The median price of homes sold in the Northeast during the month was $236,700 which was 15 lower than last year.

In the Midwest, existing-home sales jumped 10.9 percent to a level of 1.22 million and are 8.0 percent higher a year ago. The median home price in the Midwest have dropped 5.9 percent to $157,200.

In the South, sales were higher by 7.1 percent to an annual rate of 1.95 million and 5.4 percent above July 2008. The median home price in the South was $164,500, down 7.1 percent from a year ago.

Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which was 28.0 percent lower than July 2008.

Total housing inventory at the end of July increased 7.3 percent to 4.09 million existing homes available for sale, which at current sales pace would be a 9.4-month supply. This was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.

The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.