WASHINGTON — Home resales posted the largest monthly increase in at least 10 years last month as first-time buyers rushed to take advantage of a tax credit that expires this fall.
The National Association of Realtors said Thursday that home sales rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June.
It was the fourth-straight monthly increase and the highest level of sales since August 2007. Sales had been expected to rise to an annual pace of 5 million, according to economists surveyed by Thomson Reuters.
The median sales price was $178,400, down 15 percent from $210,100 in the same month last year.
"The housing market, with today's strong rise in sales, has decisively turned for the better," said Lawrence Yun, the trade group's chief economist.
The inventory of unsold homes on the market rose to 4.1 million, from 3.8 million a month earlier. That's a 9.4-month supply at the current sales pace, unchanged from a month earlier.
Sales of foreclosures and other distressed properties made up about a third of all transactions last month, down from nearly half earlier this year. In places like San Diego and Orlando, buyers are snapping up foreclosed properties at deep discounts, and real estate agents are pressing banks to release more foreclosures onto the market.
First-time buyers will need to sign a contract on a home by mid-October if they want to qualify for a tax credit that allows them to save up to $8,000 on the purchase. Sales need to be complete by the end of November, but real estate agents and homebuyers are lobbying Congress to get that credit extended
"It would be unfortunate to see the momentum halted," Yun said.