Sales of existing US homes jumped more than forecast in July to the highest level in almost two years, signalling the housing crisis that crippled the world’s largest economy is easing.

Purchases climbed 7.2% to a 5.24m annual rate, the most since August 2007, the National Association of Realtors said today in Washington. The gain was the biggest since records began in 1999. The median price fell 15%.

Foreclosure-driven declines in prices, government credits for first-time buyers and near-record-low borrowing costs may keep stoking demand, helping the economy recover from the worst recession since the 1930s. At the same time, more Americans will probably lose their homes as companies cut payrolls, indicating a rebound will be slow to take hold.