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Good Numbers From July Existing Homes Sales Report

NAR's July data for existing home sales was encouraging.  The annualized rate increased from 4.9 million units to 5.2 million units and was 5% above July, 2008.  This is the first time in nearly four years that sales were higher than the previous year.  The 7% increase from May was the largest monthly gain in ten years.

The $8,000 Federal rebate and the highest affordability record in years were primary drivers of the gain.  Distressed homes were 31% of the total, a reduction from previous months.  

The monthly supply of homes increased 7% and remains unchanged at 9.4 months (demand increased along with supply).  Six months is normal.  

The increases were spread across the country, although the West had the lowest increase: 2% over May.  The West is experiencing inventory shortages as buyers and investors are taking advantage of prices that are almost 30% lower than a year ago.