The U.S. housing market is rebounding faster than expected.

The question is, can it last?

Sales of existing homes in July posted the largest monthly increase in at least 10 years as first-time buyers rushed to take advantage of a tax credit that expires Nov. 30. Sales jumped 7.2 percent and beat expectations, the National Association of Realtors said Friday.

“The housing market has decisively turned for the better,” said Lawrence Yun, the trade group's chief economist.

Sales hit a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. Sales had been expected to rise to an annual pace of 5million, according to economists surveyed by Thomson Reuters.

July's results marked the fourth consecutive monthly increase, which hasn't happened since 2004. Sales also were up compared with a year ago, which last happened in 2005.

Year-over-year results are especially meaningful because they compare similar time periods. Home sales usually pick up in the spring and summer because parents want to move before school starts.

Risks to the rise in sales, however, are job cuts, mortgage rates and the looming end to the homebuyer tax credit of up to $8,000. And the last one could be a doozy because first-time buyers are snapping up one out of every three homes.

The real estate industry is lobbying to have the credit extended, but it's unclear whether Congress will be swayed. “I would not be at all surprised to see a dip at the end of the year once the tax credit expires,” said Robert Dye, senior economist with PNC Financial Services Group.

Sales of foreclosures and other distressed properties made up about a third of all transactions last month, down from nearly half earlier this year. Those sales helped drag down the national median sales price by 15 percent to $178,400.

The inventory of unsold homes on the market rose to 4.1million, from 3.8 million a month earlier, as buyers who had held their homes off the market in the past decided to list them for sale. That's a 9.4-month supply at the current sales pace, unchanged from June.

Staff writer Stella M. Hopkins contributed. Charlotte Observer 8/22/2009