Sales of previously occupied U.S. homes rose in July as homebuyers were encouraged by a modest pullback in mortgage rates, slowing home price growth and the most properties on the market in five years.

Existing home sales rose 2% last month from June to a seasonally adjusted annual rate of 4.01 million units, the National Association of Realtors said Thursday.

Sales edged up 0.8% compared with July last year. The latest sales figure topped the 3.92 million pace economists were expecting, according to FactSet.

Home prices rose on an annual basis for the 25th consecutive month, although the rate of growth continued to slow. The national median sales price inched up just 0.2% in July from a year earlier to $422,400.

“The ever-so-slight improvement in housing affordability is inching up ho

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