Existing home sales rose in July, pushing prices up for the fifth straight month, according to the National Association of Realtors.
Sales of existing single-family homes, town homes and condos increased 2.3% to an annual rate of 4.47 million properties. It's more than 10% above the pace measured at the same point last year.
The median home price increased 9.4% from last year to $187,300 in July. It was the strongest annual gain in prices since January 2006, the same year prices last rose for five consecutive months.
Prices in the West jumped more than 24% from one year ago to a median $238,600, NAR said.
Roughly one in four home sales were still on homes either in foreclosure or on the verge of it. Short sales accounted for 12% of sales during July, as did REO sales.
NAR said it was lobbying government agencies to release more foreclosed homes onto markets where inventory is constrained. Banking analysts said this would depress home prices if more of the roughly 4.5 million to 5.6 million properties in the shadow inventory were to reach the market if demand flattens.
NAR President Moe Veissi insisted the demand is there. One-third of homes purchased in July were on the market for less than one month, he said.
Total inventory reported by NAR — homes listed for sale on multiple listing services across the country — did increase 1.3% in July to roughly 2.4 million properties. This represented a 6.4-month supply.
Roughly 27% of buyers in July used cash, still around the same rate last year. Real estate investors bought 16% of the homes, down only slightly from 18% the year before.
The Northeast recorded the largest increase in sales, up 7.4% from last year.