US housing sales increase in July

House prices have fallen in the wake of the US housing slowdown

Sales of previously owned homes in the US rose 3.1% in July, as buyers took advantage of falling prices in the wake of the housing slowdown.

Sales climbed to a seasonally adjusted annual rate of 5 million units, said the National Association of Realtors.

While the figures were greater than expected, home sales were still 13.2% less than the level a year earlier.

Many parts of the US worst hit by the US sub-prime crisis have seen prices slump, sending average prices lower.

The median price for homes sold in July fell 7.1% year-on-year to $212,000 (£114,439).

"The small rise in monthly home sales is a reflection of increased sales of foreclosed homes at very low prices, rather than a pick-up in the regular private sales market," said economist Ian Shepherdson at High Frequency Economics.

"But they all count," he added.

However despite the increase in sales, the number of unsold homes for sale was sharply higher.

Unsold single-family homes and condominiums increased to 4.67 million, matching the record set in April.

Unsold homes are increasing in the number of foreclosures increase.

Richard Gaylord, president of the National Association of Realtors said: "We hope the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead."