Home Sales Soar 7.2% in July

Home sales soar 7.2 percent in July

First-time buyers rushed to take advantage of tax credit

The Associated Press

updated 7:59 a.m. PT, Fri., Aug 21, 2009

WASHINGTON - The U.S. housing market is improving 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.

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

Reuters.

“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.

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