July pending home sales rise to two-year high

WASHINGTON (AP) — Pending U.S. home sales rose more than expected in July to the highest level in more than two years as first-time buyers rushed to take advantage of a tax credit that expires this fall.

The National Association of Realtors said today its seasonally adjusted index of sales contracts signed in July for previously occupied homes rose 3.2 percent to 97.6. It was the sixth straight increase and 12 percent above the same month last year.

Economists surveyed by Thomson Reuters expected the index would edge up to 96.5.

Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer of how sales completed this month and next will turn out. However, delays in getting mortgages approved and appraisals completed have lengthened the time it takes to close a deal in many cases.

The U.S. housing market is rebounding more rapidly than expected from its historic bust, as low prices and the looming expiration on Nov. 30 of a first-time home buyers tax credit of up to $8,000 have spurred sales. Home prices in most of the country have started to rise from the depths of the housing slump.