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More than 40 percent of home sales in Maricopa County were foreclosures during the month of June, according to a report released Thursday by Arizona State University.

Nearly 7,850 homes were recorded in June by the Morrison School of Management and Agribusiness at ASU's Polytechnic campus. Of those sales, 3,275, or nearly 42 percent, were returned to lenders or sold to the highest bidders, while only 4,565 were traditional sales.

During the same month in 2007, only about 13 percent of the county's sales were foreclosures, the report said. The number of foreclosures in May and June this year were roughly the same.

On Wednesday, a report by housing report by local analyst RL Brown showed the Valley's housing market continued to plummet during the second quarter with new home construction permits dropping 38.4 percent from last year, while existing home sales sank 13.5 percent.

On Thursday, Morrison School experts said declining prices due to the glut of vacant homes on the market and abundant capital for lower-priced homes are creating a feeding frenzy among investors and home buyers, especially among those in the lower income ranges.

The median price for a home in the traditional market dropped to $218,000 from $265,000 a year ago, while the median price for foreclosed properties dipped to $169,890 from $225,900.

"Investment interest is being driven by the anticipation that home prices will rise again in the next few years," the school said in a statement.

That's bad news for sellers, many of whom are selling their homes for less than what they owe.