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Existing home sales 2% at an annualized rate of 5.59 million in July, the highest since 2007, according to the National Association of Realtors.
Economists had estimated that sales of previously occupied homes fell 1.2% at an annualized rate of 5.43 million in July.
Single-family home sales rose 2.7% to an annual rate of 4.96 million, the highest since February 2007. Existing co-op sales dropped 3.1% to an annual rate of 630,000 units.
Lawrence Yun, NAR chief economist, said, "the increase in sales in July solidifies what has been an impressive growth in activity during this year's peak buying season. The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now."
"As a result, current homeowners are using their increasing housing equity towards the downpayment on their next purchase."
The median price of an existing home was 5.6% higher than a year ago, at $234,000. The NAR noted that even though sales are strong, demand could slow as homes get more expensive.
Last month, existing home sales rose at the fastest pace since February 2007. May and June were the strongest two months for sales since early 2007, the NAR said.
And on Tuesday, the Census Bureau said housing starts climbed at the highest rate in nearly eight years.
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