Sales of existing US homes fell to a 15-year low in July and the number of unsold houses, boosted by foreclosures and poor job growth, jumped. Distressed home sales - - bank sales and other foreclosure properties - - accounted for 32% of transactions.

The National Association of Realtors said existing-home sales¹, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2% to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5% below the 5.14 million-unit level in July 2009. The sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales - - accounting for the bulk of transactions -- are at the lowest level since May of 1995.

Lawrence Yun, NAR chief economist, said a soft sales pace likely will continue for a few additional months. “Consumers rationally jumped into the market before the deadline for the $8,000 home buyer tax credit expired in April. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.

“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years,” Yun said.

According to federal mortgage financier Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.56% in July from 4.74% in June; the rate was 5.22% in July 2009. Last week, Freddie Mac reported the 30-year fixed was down to 4.42%.

The national median existing-home price² for all housing types was $182,600 in July, up 0.7% from a year ago. Distressed home sales are unchanged from June, accounting for 32% of transactions in July; they were 31% in July 2009.³

“Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses,” Yun said. “Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.”

Total housing inventory at the end of July increased 2.5% to 3.98 million existing homes available for sale, which represents a 12.5-month supply⁴ at the current sales pace, up from an 8.9-month supply in June. Raw unsold inventory is still 12.9% below the record of 4.58 million in July 2008.

A parallel NAR practitioner survey shows first-time buyers purchased 38% of homes in July, down from 43% in June. Investors accounted for 19% of sales in July, up from 13% in June; the balance were to repeat buyers. All-cash sales rose to 30% in July from 24% in June.

Single-family home sales dropped 27.1% to a seasonally adjusted annual rate of 3.37 million in July from a pace of 4.62 million in June, and are 25.6% below the 4.53 million level in July 2009; they were the lowest since May 1995 when the sales rate was 3.34 million. The median existing single-family home price was $183,400 in July, which is 0.9% above a year ago.

Single-family median existing-home prices were higher in 11 out of 19 metropolitan statistical areas reported in July in comparison with July 2009 (the price in one of 20 tracked markets was not available). However, existing single-family home sales fell in all 20 areas from a year ago.

Existing condominium and co-op sales fell 28.1% to a seasonally adjusted annual rate of 460,000 in July from 640,000 in June, and are 24.0% below the 605,000-unit level in July 2009. The median existing condo price⁵ was $176,800 in July, down 1.7% from a year ago.

Regionally, existing-home sales in the Northeast dropped 29.5% to an annual pace of 620,000 in July and are 30.3% lower than a year ago. The median price in the Northeast was $263,800, up 4.8% from July 2009.

Existing-home sales in the Midwest fell 35.0% in July to a level of 800,000 and are 33.3% below July 2009. The median price in the Midwest was $151,600, down 2.8% from a year ago.

In the South, existing-home sales dropped 22.6% to an annual pace of 1.54 million in July and are 19.8% below a year ago. The median price in the South was $156,300, down 3.3% from July 2009.

Existing-home sales in the West fell 25.0% to an annual level of 870,000 in July and are 23.0% below a year ago. The median price in the West was $224,800, up 3.3% from July 2009.

¹Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the US Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90% of total home sales, are based on a much larger sample – more than 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

²The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

³Distressed sales, first-time buyer and investor data are from a survey for the Realtors Confidence Index, scheduled to be posted September 2.

⁴Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, condos were measured quarterly while single-family sales accounted for more than 90% of transactions).

⁵Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.