Would-be home buyers continued to sit on the sidelines last month, driving down Southern California home sales to their lowest pace in 12 years and pressing down prices in the region’s less-expensive neighborhoods, data released today showed.

Yet even as home sales fell 27% regionwide, the median price of all homes sold in the Southland’s six counties rose 3.7%, to $505,000, in July compared to a year ago, thanks to more robust sales at the high-end of the market, according to real estate research firm DataQuick Information Systems.

The ranks of federally chartered banks making subprime mortgage loans didn’t shrink during the second quarter, but most tightened their standards, and demand for such loans did not grow.

A Federal Reserve survey of senior loan officers at 50 banks found that 16 were still making subprime mortgage loans — the same number reported during a survey in April.

The 16 banks, which also made other types of mortgage loans, accounted for 57 percent of all residential real estate loans on the books of commercial banks as of March 31.

Foreclosure data provider RealtyTrac today reported that Stockton, Calif., had the highest foreclosure rate among all metro areas in the nation during the first half of 2007, with one foreclosure filing for every 27 households.

The company’s Midyear Metropolitan Foreclosure Market Report found that Detroit was second on the list, with one foreclosure filing for every 29 households, and Las Vegas was third with one foreclosure filing for every 31 households.

Mortgage loans funded by Countrywide Financial Corp. fell below the $40 billion-a-month mark in July for the first time since February, the company said Tuesday, while foreclosures as a percentage of principal balance surged through the 1 percent threshold.

The $39 billion in mortgage loans funded in July by the Calabasas, Calif.-based lender represented a 6 percent increase over the same month last year, but a 13.7 percent decline from the $45.3 billion loans funded in June.

The decline reflected a shrinking mortgage market and Countrywide’s tighter lending guidelines, which have “significantly curtailed total production,” said David Sambol, president and chief operating officer, in a statement.