Taking advantage of falling prices, buyers have stormed back to the market, surging the sales of previously owned homes in July, due to lower interest rates and a tax credit for first-time homeowners.

According to the National Association of Realtors, the number of existing home sales rose 7.2 percent in July from June, whereas the sales of condos and single-family homes each rose for the month. It was the largest monthly gain since the group began tracking existing home sales in 1999.

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For the first time in three weeks, mortgage rates have fallen increasing the chances of stabilization in the housing market.

The mortgage rate had been stable since 30 years and dropped to 5.22 percent from 5.25 percent. It is expected that new lower rates may increase demand for homes in the fourth year of the housing recession. Sales of new and existing homes increased in June as falling prices and a government tax credit attracted buyers. The home price index rose 0.5 percent in May from the prior month, the first gain since July 2006.

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Due to higher treasury rates, last week the mortgage rates went up a bit. 10-year U.S. Treasury rates were up at 3.65 percent compared to 3.30 percent of the week earlier. Still the rates are quite low if we see them in long-term historic perspective.

These low interest rates are bringing back the home buyers. It the trend continues, the housing crisis might be near it’s end. Mortgage re-finance activity is also picking up pace as result of low interest rates.

According to to Mortgage Banker’s Association the Refinance index rose more than 17 percent from the weak earlier.

National Association of Realtors also reported that Pending Nome Sales index is also creeping up slowly for last 4 weeks.

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This week in the US mortgage rates fell. Easing concern the Federal Reserve decision to lower down the mortgage rates by purchasing mortgage-backed securities was losing momentum.

It was said by mortgage buyer Freddie Mac of McLean, Virginia, in a statement that the average 30-year rate dropped to 5.32% which was 5.42%.While the 15-year rate was at 4.77 %.

Efforts are being made by Federal Reserve Chairman Ben S. Bernanke to lower down the borrowing costs. He has got a $1.25 trillion program to purchase securities backed by home loans.

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With the entire nation’s eyes on the real estate market, the analysts and the media these days are keeping a very close eye on how the mortgage and sales market is faring in every region of the country.

For the sixth consecutive month in February, home sales in Florida showed an upward trend, compared to the same period a year ago, according to the data released by the Florida Association of Realtors® (FAR). And what’s more is that the February figures outranked those of January even, in both home and condo sales.

It has been noted that 9,858 homes were sold statewide last month, compared to 8,181 in February 2008 – an increase of 20 percent. Even on a monthly comparison, February’s statewide sales soared by 16.7 percent, compared to January 2009.

As far as condos are concerned, according to Florida Realtors, a 15 percent gain has been recorded in condo sales. This reflects the continuing trend of higher sales of both existing homes and existing condos, compared to the figures of the same time period in 2008. A jump of 25.1 percent was recorded for statewide condo sales over the number of condos sold in January alone. Read the full story