INSTANT VIEW: July existing home sales rose 3.1 pct

NEW YORK (Reuters) - The pace of existing home sales in the United States rose in July to a 5.00 million-unit annual rate, the National Association of Realtors said in a report on Monday that showed prices dipped and the inventory of homes hit a record high.

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.

COMMENT:

LINDSEY PIEGZA, MARKET ANALYST, FTN FINANCIAL, NEW YORK:

"We see some demand seeping back into the market. The majority of that was due to the price decline. As prices continue to decline, we should see more demand."

"We don't see the total supply diminishing because we are seeing more foreclosures and distress sales. We need to see prices fall further to clear the overhanging inventory. The more months of positive sales should be a sign of home buyer confidence."

"It's not enough to sign a change in trend, but it's a positive report. Hopefully we could move in this direction. It could take up to two years for prices to start climbing back up again."

BORIS SCHLOSSBERG, DIRECTOR OF CURRENCY RESEARCH, GFT FOREX, NEW YORK:

"The market was expecting a bounce anyway, but this is still mildly dollar-positive. I do think the impact on the dollar would be short-lived. The flows this week are still being driven by macroeconomic factors such as oil and equities. Whether we have seen a bottom in the housing sector would depend largely on oil prices. If oil continues its decline, then that should boost consumer spending and hopefully support the housing market."

AL KUGEL, CHIEF INVESTMENT STRATEGIST, ATLANTIC TRUST, CHICAGO:

"The data is not too significant, and the market hasn't reacted dramatically to it. It is interesting that home sales have pretty much leveled off in 2008. We were going down at a very rapid rate in 2006 and 2007. But that's really about it."

"Financial stocks are pretty much in the red across the board. They're the main determinant of the direction of the overall market, and it's hard to make progress when they are down. Fannie and Freddie are on everyone's mind, but nothing has happened. It's lots of speculation but no developments."

MARKET REACTION:

STOCKS: The benchmark S&P500 US stock index slipped and was down 0.87 pct at 1281;