(SyndicateMyNews) - Existing home sales rose in June at a 3.6% annual pace, marking the third consecutive month of improving sales. On a seaonsally adjusted annual basis, 4.89 million homes were sold in June compared to 4.72 million the prior month, according to the National Association of Realtors' report.

National Association of Realtors (NAR) chief economis Lawrence Yun predicted that existing home sales would continue to improve, but only gradually. Yun noted that home prices were lower and when combined with tax benefits, more first-time buyers were beginning to appear.

"We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions," said Yun.

Yun remained critical of new appraisal rules which are effecting home purchases. "Despite the rise in closed transactions, many Realtors are reporting lost sales as a result of new appraisal standards that went into effect May 1 of this year," Yun claimed.

A June survey of NAR members shows 37 percent experienced at least one lost sale as a result of the new Home Valuation Code of Conduct, with seven out of 10 reporting an increased use of out-of-area appraisers. Seventy percent of NAR appraiser members said consumers were paying higher fees, while 85 percent report a perceived reduction in appraisal quality.

"Clearly the process needs to be revised, but the most logical approach is to use appraisers with local expertise, industry designations and access to local data, who make a physical examination of the property and use apples-to-apples comparisons with nearby home sales," Yun said. "In many cases, normal homes are being compared with distressed homes sold at a discount, which often are in subpar condition - this is causing real harm to both buyers and sellers."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.42 percent in June from 4.86 percent in May; the rate was 6.32 percent in June 2008. Mortgage interest rates have trended lower in recent weeks.

Total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4-month supply2 at the current sales pace, down from a 9.8-month supply in May. Raw inventory totals are 14.9 percent below a year ago.

"This is another hopeful sign - if we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year," Yun said.

An NAR practitioner survey in June showed first-time buyers accounted for 29 percent of transactions, unchanged from May, and that the number of buyers looking at homes is up nearly 12 percentage points from June 2008.