Foreclosed homes now make up less than 30% of the existing-home sales in the Phoenix area for the first time in more than two years, according to a report from the W.P. Carey School of Business at Arizona State University. The percentage of existing homes for sale that were real-estate owned clocked in at 29% in July, representing the fifth straight month of declines. In January and February, foreclosures represented 43% of the existing-home transactions in the market. The rate fell to 38% in March, 36% in April, 35% in May, 31% in June, and finally, to 29% in July. Still, the report's author isn't celebrating yet. Arizona has been among the hardest hit markets in the housing crisis with some 50% of borrowers underwater on their mortgages — or owning more than what their homes are worth, behind only Nevada where 63% of borrowers have negative equity, according to CoreLogic. "While the local housing market is beginning to produce some positive movement, the main concern is the economic environment that surrounds the market,” according to Jay Butler, W.P. Carey School of Business professor emeritus. "Currently, there are mounting concerns about the anemic job and economic growth that are limiting consumer confidence." Initial jobless claims dipped slightly on Thursday to 395,000, falling below 400,000 — an important watermark which typically signifies payroll growth. The Phoenix market had a little more than 2,500 single-family home foreclosures in July. That's an improvement from almost 3,300 foreclosures in June and more than 3,800 foreclosures last July. Arizona had the sixth-highest foreclosure rate in the country last month, according to RealtyTrac, with 10,098 foreclosure filings in July. The median price for an existing single-family home was $124,900 in July, down from $137,500 last July. "Until there is a more favorable economic and financing environment, investors will continue to be the leading buyers of local housing, instead of more permanent and stable homeowner/occupants," Butler said. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.