Housing in recovery mode

Existing homes sales leap

In the clearest sign yet that the housing market is on the road to recovery, existing home sales jumped an impressive 7.2% in July to a seasonally adjusted annual rate of 5.24 million units, well above the Bloomberg estimate of 5.0 million.

July's advance brings the streak of increases to four months in a row (the first time in 5 years), and according to the National Association of Realtors, the monthly rise was the largest in 23 years.

The chief economist for the NAR said, "The housing has turned decisively for the better." And I agree. Existing home sales are well off the bottom and are being aided by the first time home buyers tax credit, historically low interest rates, while the drop in prices over the last couple of years is finally encouraging reluctant buyers to step into the ring.

The number of homes on the market did increase last month, possibly as sellers decide to test the waters, but the rise in sales kept the supply at 9.4 months.