The National Association of Realtors said home resales rose 3.1 percent to a 5 million annual rate from 4.85 million during June. Estimates had the figure at 4.92 million.

The median home price was $212,400 in July, down 7.1 percent from $228,600 in July 2007. The median price in June this year was $215,100.

The report said falling prices were restraining sales, as would-be buyers wait for a better deal, and high inventories are driving down prices, The Wall Street Journal said.

Despite the sales increase, inventories of homes rose 3.9 percent at the end of July to a record-high 4.67 million available for sale, which represented an 11.2-month supply at the current sales pace. There was an 11.1-month supply at the end of June.