Hopes for a rapid recovery in the troubled US housing industry remained subdued yesterday as sales of previously owned homes showed an unexpectedly strong 3.1% increase but failed to stem a rise in inventories.

With sharply lower prices luring buyers in areas hit hardest by the mortgage crisis, the pace of existing home sales jumped to a seasonally adjusted annual rate of 5m units in July – the highest in five months – from 4.85m units in June, the National Association of Realtors said yesterday.

The data strengthened evidence that home sales have stabilised recently, providing a springboard for recovery in the US housing market, which has been at the root of the downturn and the unrest in financial markets.

Financial Times, The Independent