Existing home sales rose steadily for the third consecutive month in July, an industry report showed on Thursday.

Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2 percent from the previous month to a seasonally adjusted annual rate of 5.59 million in July, remaining at the highest pace since February 2007, said the National Association of Realtors (NAR) on Thursday.

Existing home sales account for a larger share of the market than new home sales. "The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now," NAR chief economist Lawrence Yun said.

Total housing inventory at the end of July declined 0.4 percent to 2.24 million existing homes available for sales, which represents a 4.8-month supply at the current sales pace.

The median existing home price for all housing types in July was 234,000 U.S. dollars, 5.6 percent above the level a year ago.

Yun said that, despite the strong growth in sales since this spring, declining affordability could begin to slowly dampen demand.