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New Buyers Fuel High July Home Sales

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.

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"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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