As first-time buyers rush to take advantage of the soon to expire tax credit, home sales around the nation rose more than expected in July to their highest level in over two years.
The National Association of Realtor's report released earlier this week showed that the housing market is in fact rebounding much faster than expected. Record low prices coupled with the fast approaching end to the first-time homebuyers' tax credit of up to $8,000 on November 30th; have all spurred a large gain in home sales and furthermore even home prices throughout most of the country have begun to rise from their deepest low of the housing market slump.
Many analysts feel that stabilization in the housing market is undeniable at this time.
The N.A.R. also said Tuesday that, "the seasonally adjusted index of sales contracts signed in July for previously occupied homes rose 3.2 percent to 97.6." That is the sixth straight monthly increase and is 12 percent higher than July of last year.
Economists had expected that the index would go up to only 96.5.
It should be noted that there is a one-to-two month lag between a signed contract and the close of escrow and delays in getting mortgages approved and appraisals completed have slowed due to this sudden surge.
Analysts have also predicted that when the tax credit expires or if mortgage rates begin to rise from their record lows home sales will drop off.
Another factor in all of this is that home prices are being pushed down due in part that foreclosures continue to rise and banks are forced to sell those homes at deep discounts.
There was a 12 percent jump in sales contracts in the West that helped to drive July's overall increase.
Despite the fact that home prices are still 30 percent below their mid-2006 peak, this new direction should provide relief to home buyers and lenders alike.