Home Sales At Two Year High

They're driven by an income tax credit which is due to expire and record-low mortgage rates.

Underneath that, the housing market looks weak.

Three months of stability don't seem so impressive compared to the plunge of the past two years. Things weren't nearly as bad a year ago.

Buyers are snapping up inexpensive foreclosed properties.

Banks still have thousands of foreclosed properties they want to bring to market when they can get a better price for them than what is currently available.

The Washington Post reports:

In the meantime, the housing market remains weak and prices continue to decline, analysts said. The national median existing-home price fell to $174,900 in September, down 8.5 percent from the same time last year, according to the Realtors. Sales prices fell the most in the West, 15 percent, but the South saw a 7.6 percent decline.

That is a smaller price drop than in previous months, reinforcing hopes that home prices may be starting to stabilize, said Lawrence Yun, the Realtors' chief economist. "It's a positive momentum, but whether we have a firm stabilization is unclear," he said.

But recent price stabilization in some parts of the country may be temporary, some analysts said. Rising unemployment will push more borrowers into foreclosure and ultimately dump more homes on the market, dragging down prices again, they said.