Existing-home sales activity across the country is at its highest since July 2007, according to a report released Friday by the National Association of Realtors. Current housing supply is at its lowest in two and a half years. Much of this, according to the NAR chief economist Lawrence Yun, can be attributed to the first-time buyer credit, prompting him, like many others in the industry, to hope for an extension—and even a possible expansion—of the credit past its deadline next month. First-time buyers accounted for more than 45 percent of the sales during the past year.

Sales in single-family, townhomes, condos and co-ops jumped to a seasonally adjusted rate of 5.57 million in September, up 9.4 percent from 5.10 million in August, and the highest since the 5.73 million sold in July 2007. In the Northeast, existing-home sales in September rose 4.4 percent to an annual level of 950,000, or 11.8 percent higher than September 2008. This is well-reflective of the market overall, as existing-home sales typically account for 85 to 90 percent of total home sales, according to the NAR.

Unsold inventory in existing homes is 15 percent below a year ago, and fell 7.5 percent from August to September, to 3.63 million units, which represents a 7.8-month supply at the current sales pace, vs. a 9.3-month supply in August. However, the median price for existing homes in September was $174,900—8.5 percent lower than September 2008, although NAR attributes the low number in part to distressed properties—29 percent of transactions in September were in distressed homes. In the Northeast, median price was $234,700, down 7 percent from last year.

NAR President Charles McMillan, a residential broker in Dallas-Fort Worth, pointed out that home price-to-income ratio has fallen below the historical average and said that “affordability conditions this year are the highest on record dating back to 1970.” McMillean, as Yun and many others, also expressed concern about the first-time buyer credit expiration.