Home Sales Spike: Real Sign of Recovery?

Economists got a surprise today with home sales jumping 10 percent to a seasonally adjusted annual rate of 4.53 million in September, from a downwardly revised 4.12 million in August. While this is good news, it's still 19.1 percent below the 5.6 million pace set in September 2009. But this September's numbers from the National Association of Realtors probably reflect a realistic picture of the anemic housing recovery.

That's not necessarily damning news, because new homebuyers were rushing in September 2009 to find a home before the end of the first tax credit last November. Sales fell and then picked up steam again in time for the second tax credit, which required a contract by April 30.

People rushed to sign a contract by April and most of those deals were closed by June, so July and August were very slow months. Most buyers pushed up their planned summer purchase to take advantage of the tax credit in April, especially after it became clear that Congress was not likely to pass another one.