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The National Association of Realtors (NAR) reported this morning that existing home sales rose by 7.8% to a seasonally adjusted annual rate of 4.82 million units in August, compared with 4.47 million units in July. Analysts had been expecting a rise to 4.6 million units.

Total housing inventory stood at 2.47 million existing homes at the end of August, up 2.9% from 2.4 million in July. The total represents a 6.1-month supply at the pace of sales. Last July the inventory stood at a 8.2-month supply.

Distressed sales accounted for 22% of August sales, a 31% decrease from August 2011 and down 24% month-over-month. Foreclosed properties sold for a discount of 19% in August, and short sales were discounted 13%.

The nationwide median price for an existing home sale was $187,400, up 9.5% from August 2011, but just $100 higher than July 2012. Still, the monthly increase year-over-year was the largest jump in six years.

While the NAR’s figures on sales are important — especially to the group’s member agents — the inventory numbers are probably more important as a measure of where the market is headed. Based on existing home inventory and the drop in distressed sales, the housing market continues its recovery. According to the NAR’s chief economist:

Inventories in many parts of the country are broadly balanced, favoring neither sellers nor buyers. However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices.

Paul Ausick