Home Sales Rise in July as Prices Fall

Existing-home sales improved slightly in July, but inventories spiked to record levels as housing prices continue to fall.

Existing-home sales rose 3.1% from June to July to an annualized rate of 5 million units, the National Association of Realtors said on Monday. The sales rate was 13.2% below a year ago. The national median sales price fell 7.1% from last year to $212,400.

Inventories spiked 3.9% from last month to a record 4.67 million homes for sale at the end of July. This represents 11.2 months of supply at the current sales pace. The rise was due to a sharp increase in condo inventory, as single-family supply declined, the NAR said.

The report sent homebuilder stocks down in recent trading Monday morning. Toll Brothers (TOL Quote - Cramer on TOL - Stock Picks), KB Home (KBH Quote - Cramer on KBH - Stock Picks) and Centex (CTX Quote - Cramer on CTX - Stock Picks) were each down about 1% to 2%. The SPDR S&P Homebuilders (XHB Quote - Cramer on XHB - Stock Picks), an exchange-traded fund that tracks the sector, was down 1.3%.

Sales across the U.S. were still sharply down from a year ago, but most regions showed improvement from June to July.

The West region of the country showed strength, with home sales rising 9.7% from the previous month, but prices in the region were down a whopping 22.2% from a year ago.

Sales rose 5.9% in the Northeast from last month, while prices were down 5.9% from last year.

In the Midwest, sales inched up 0.9%, with prices up 1% from a year ago.

Sales in the South fell 0.5% from last month, while prices were down 3.5% from a year ago.