US existing home sales rose 3.1 pct in July

Economists polled by Reuters were expecting home resales to rise to a 4.90 million-unit pace, from the 4.86 million-rate initially reported for June, which was downwardly revised to 4.85 million.

The inventory of homes for sale rose to a record 4.67 million homes or a 11.2 months' supply at the current sales pace, matching a record set in April.

The median national home price declined 7.1 percent from a year ago to $212,400.

U.S. stocks pared losses after the data while yields on the benchmark 10-year Treasury were lower and the dollar was little changed.

Many markets in the West and Florida that have seen sharp price declines recently are seeing the volume of sales rebound, but it is too soon to call a bottom for those regions, Realtors' chief economist Lawrence Yun said. "There is still too much uncertainty," he said.