Friday, August 21 2009
Sales of previously owned homes surged in July as buyers stormed back to the market, taking advantage of falling prices, lower interest rates and a tax credit for first-time homeowners, an industry group reported on Friday.
Sales of condos and single-family homes each rose for the month, and the overall number of existing home sales rose 7.2 percent in July from June, the National Association of Realtors reported. It was the largest monthly gain since the group began tracking existing home sales in 1999.
Moreover, home sales last month were 5 percent higher than in July 2008. Homes were selling at a seasonally adjusted annual rate of 5.2 million in July, up from a rate of 5 million last year.
It was the first year-over-year increase in home sales since November 2005.
“I’m a little bit flabbergasted,” said Patrick Newport, an economist at IHS Global Insight. “These are really good numbers.”
Some 30 percent of the homes sold in July were distressed properties like short sales or foreclosures, but that is a lower percentage than in previous months, when nearly half of all existing-home sales were estimated to be foreclosures.
Over all, economists said, Friday’s numbers offered another signal that the housing market was climbing out of the basement, even as foreclosures and delinquencies creep higher amid rising job losses.
Existing home sales — which make up the bulk of home sales — have risen over the last four months after crashing to record-low levels during the collapse of the housing market last year.
Sales of new homes rose 11 percent in June from a month earlier and are up since the winter, even though they are sharply lower than in the peak years of the housing boom. And sale prices for single-family homes are starting to stabilize in some of the country’s most distressed markets as bargain-hunters snap up distressed properties and cheap foreclosures.
The median sale price of homes nationwide fell to $178,400, and more homes poured onto the market as foreclosures increased and sellers detected a hint of enthusiasm among buyers.
Lawrence Yun, chief economist at the Realtors’ association, cheered the latest numbers.
“The housing market has decisively turned for the better,” he said in a statement.