New Buyers Fuel High July Home Sales

(CBS/AP)  Updated 11:57 a.m. ET

The housing market is rebounding quicker than expected, with home resales in July posting the largest monthly increase in at least 10 years as first-time buyers rushed to take advantage of a tax credit that expires this fall.

The National Association of Realtors said Friday 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.

White House Press Secretary Robert Gibbs responded to the report by saying it "appears the housing market is bottoming out a bit," CBS White House correspondent Mark Knoller reported from Friday's press conference.

Sales had been expected to rise to an annual pace of 5 million, according to economists surveyed by Thomson Reuters.

Fed Says It Again: U.S. Economy on Rebound

"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.

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.

Those sales helped drag down the median sales price by 15 percent to $178,400.

First-time buyers must complete their sales transactions by the end of November to take advantage of a tax credit of 10 percent of the purchase price, up to $8,000. The real estate industry is lobbying Congress to get the credit extended.

"It would be unfortunate to see the momentum halted," Yun said.

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 June.

[sjc_1]

Situations change on the margins. You have people sitting on the sidelines waiting for the right time. Whether cars or houses, when there is an incentive it is the right time. That is not sustainable, but it can "prime the pump". Once you get it going you can harness the expansion and pay down the debt....simple.

[bajabenedik-2009]

I think what we're seeing right now is a temporary pickup of the economy and housing market. Those predicting the economy is on the mend, would be better prepared to expect another collapse in the market if our government doesn't tighten its belt (cut back on unneccesary spending) and to use the money more wisely by creating real jobs in U.S. where we are exporting goods again.

[timing20002000]

WOW!!! It's amazing to see all the Republicans praying and hoping that the economy gets worse, that homes don't sell, that everything fails. You guys are truly, sad, pathetic, and full of hate. You so called CHRISTIANS.

[bajabenedik-2009]

It's not about that. I'm an Independent who voted for Obama. If you look at the real picture of how our economy operates, we are in for a collapse of major proportions if we don't start creating manufacturing jobs again in the U.S. so we start exporting goods again. If we continue to import, borrow and spend, and continue our current cycle of huge trade deficits and federal deficits, the U.S. dollar is eventually going to collapse. If the foreign central banks decide to use another currency as their reserve currency, it will be the beginning of the collapse.

[reveal5]

Wow, the GOP'ers are consistent. Always willing to make cowfarts out of lemonade.

[tms-42]

it started in my opinion in the 80's with the reagan deregulation. and a new crop of adults that had not experianced the 30's embraced the market again.

[parisdakar]

This is no good. Fast rebounds equals inflation. What do people think should happen? We should try to go back to the overborrowing and overspending of the last decade??

[reveal5]

parisdaker thinks that years of economic housing slump followed by the beginnings of a housing market renewal equals fast rebound. How do you talk to these[people?]? I mean the typing fingers are engaged but there is no motor in the cranium.

[tms-42]

i think this is just frist time home buyers getting suckered in by the $8000 goverment kicker. the fed lead home price speculation in eary 2002 to save our economy after the 9/11 attacks . then told us to spend spend spend. its your patirotic duty. untill home prices get back to an affordible range not much will change. i mean 30% drop is nothing when prices were up 300% over the last 8 years we still have a long way down.

[jeannettelj]

To: the-majesty. Sorry, but this mess started long before Obama took office. You sound like a BUSH fan!!

[johnbrown8888]

The press have always been hos for the banks and the real estate industry.

Just read the "real estate section" of your local newspaper, which is not marked as being entirely and completely advertising, yet describes homes in such glowing terms you'd think you were buying Buckingham Palace.

Therefore, the press has a big interest in making things look better than they are, as real estate is 10% value and 90% puffery.

No big uptick in sales or prices around here!