SPRINGFIELD — The median price of homes sold in the Pioneer Valley increased 8.9 percent in July, a continuation of positive news from the region’s housing market.

The median price of homes sold was $207,000 last month, up from $190,000 the month before. The number of homes sold rose 17.7 percent, from 429 in July 2012 to 505 last month, according to figures released Monday by the Realtor Association of Pioneer Valley.

Realtors credit the brisk market to a recovering economy, pent-up demand and low interest rates that are now starting to rise, giving many reluctant potential buyers who have been on the fence an impetus to purchase.

“It’s just wonderful to see continuing positive signs through the entire valley,” said Brian P. Sears, an owner of Sears Real Estate in Springfield and president of the Realtor Association of Pioneer Valley “All three counties are seeing increased in the median price”

The price increases are sustainable, Sears said, unlike double-digit appreciation seen in boom-and-bust housing markets like Las Vegas and Florida.

“We still have an affordable housing stock,” he said.

And modest appreciation is making it easier for homeowners who bought at the top of the market to sell if they need to. Those owners might have been underwater, having owed more on their mortgages than the homes were worth. Or even if they had equity, that equity wasn’t enough for a down payment on another home.

“It’s starting to get easier for people to sell,” he said. “People continue to see positive signs in the real estate market. We had another baby, we need that extra bedroom. Or retirees who say it is time to cash out and buy something smaller. They have that option now.”

Corinne Fitzgerald of Fitzgerald Real Estate in Greenfield said a year ago there were still a lot of distressed properties on the market. Distressed properties are former foreclosures or short sales that were sold for less than what was owed on the mortgage.

Fitzgerald was president of the Realtor Association in 2012.

But today, there are more move-up buyers in the market spurred by those low-interest rates and growing consumer confidence.

“So they are selling their entry level houses and they are buying in the $200,000 to $300,000 range,” she said. “The inventory is so low right now, sellers are in good position.”

Inventory is low, Realtors say, because builders were not putting up new homes in the last few years and the financial crisis had people reluctant to put homes on the market.

Thirty-year-fixed rate mortgages averaged 4.31 percent for the week ending July 25, according to FreddieMac.com. The average was 3.49 percent a year ago.

The inventory of homes available for purchase is also falling. There were 2,844 single-family homes listed for sale at the end of last month, down 10 percent from the 3,159 in July 2012, according to The Realtors Association.

In Hampden County, the region’s largest housing market, sales rose 17.7 percent, from 271 in July 2012 to 319 last month. The median price rose 1.1 percent from $175,500 to $177,000, according to the Realtors Association.

In Hampshire County, sales were up 19.8 percent from 111 to 133. The median price fell by 1.9 percent, from $265,000 to $260,000.

In Franklin County, sales rose 12.8 percent, from 47 to 53. The median sales price rose 16.2 percent, from $185,000 to $215,000.