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Existing home sales jumped 12.3 percent last month to a seasonally adjusted annual pace of 5.28 million units, the National Association of Realtors reported today.

However, sales were still off 2.9 percent compared to one year earlier.

NAR chief economist Lawrence Yun noted that home sales were on the “uptrend,” and said the pattern over the past six months clearly points to a housing recovery.

It may appear that way, but the national median existing-home price of $168,800 was actually down from $170,600 in November and one percent lower than a year ago.

Yun attributed that to a rise in distressed sales, which include foreclosures and short sales.

Total housing inventory fell 4.2 percent to 3.56 million existing homes for sale at the end of December, which represents an 8.1-month supply at the current sales pace.

That’s down from the 9.5-month supply in November, but there’s one major problem.

The shadow inventory – another 6,870,000 properties are either 30 or more days delinquent or in foreclosure, according to the December 2010 “First Look” Mortgage Report released yesterday by Lending Processing Services.

So despite traditional housing inventory being down month-to-month, home prices will probably be forced down for a quite a while thanks to all that excess foreclosure inventory.

This could lead to even more foreclosures as underwater borrowers jump ship, greatly diminishing any semblance of a housing recovery in 2011.

While refinance activity is buzzing, home sales are plummeting.

A day after it was revealed that existing home sales fell to their lowest point since 1996, new homes sales fell to a record low.

Yep, last month the sale of newly built, single-family homes declined 12.4 percent to a seasonally adjusted annual rate of 276,000 units, per the Commerce Department.

That’s the lowest sales rate for new homes on record, and well below (-32.4%) the July 2009 estimate of 408,000 units.

Sales fell across every region last month, with a 25.4 percent decline seen in the West, a 13.9 percent drop in the Northeast, an 8.7 percent decline in the South, and an 8.3 percent fall in the Midwest.

The median sales price of a new home sold last month was $204,000, down from $217,000 in June and $214,200 a year earlier.

The average sales price was $235,300, down from $248,300 last month and $271,100 a year ago.

Meanwhile, the inventory of new homes for sale at the end of July was 210,000, which represents a 9.1 month supply at the current sales rate.

The number of units for sale has actually fallen year-over-year, but the slower sales pace effectively increased supply.

Remember, this doesn’t include the vast shadow inventory (foreclosed homes, mortgages in default), which is also growing steadily.

Nor does it include so-called sidelined sellers, who plan to list their homes at the sign of a housing recovery.