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Sharp Rise in Home Sales in February

The wobbly housing market showed a rare sign of strength in February: pending home sales were up significantly, a report released on Monday said, suggesting that Americans took advantage of a tax credit for home buyers.

Sales rose 8.2 percent, the National Association of Realtors said. Analysts had expected sales to stay flat.

Economists said the data released on Monday suggested that buyers were re-entering the market as the expiration deadline approached for a government tax credit. Qualified home buyers have until April 30 to take advantage of a tax credit of up to $8,000. The credit drove up sales rapidly in the fall, when it was originally set to expire, but it has been slow to propel the market this spring.

Lawrence Yun, chief economist for the association, said the report “may signal the early stages of a second surge of home sales.”

“We need a second surge to meaningfully draw down inventory and definitively stabilize home values,” Mr. Yun said in a statement.

An influx of foreclosed homes, which are often offered at bargain prices, has added another reason for prospective home buyers to enter the market. The agents’ association said it expected the upward trend to continue in the March data.

The report showed that sales rose even in areas hit hard by stormy weather. Sales climbed 9 percent in the Northeast and South, which were blanketed by snow in February. The data is based on signed contracts, which usually take one or two months to translate into final sales.

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Sales were helped by a tax credit set to expire April 30.Credit...Bill Sikes/Associated Press

The jump in sales was a rare bit of good news for the housing market, which remains in a deep rut. Home prices have barely budged from extraordinarily low levels, sales are at record lows and foreclosures are rising as Americans fall behind on mortgage payments.

“I don’t think we’re in for a further slump, but I think the recovery is going to be slow and painful,” said Michael Carliner, a visiting fellow at Harvard’s Joint Center for Housing Studies. “The risk that the bottom is going to come even further out of the market is easing.”

Sales will probably suffer when the tax credit expires in April. But as unemployment recedes and the broader recovery gains steam, economists believe sales will slowly pick up and move decisively higher in 2011.

Exactly how quickly overall economic conditions will improve remains unclear. On Monday, there were signs that the service sector, which includes most of the United States economy, was beginning to improve.

The Institute for Supply Management’s report on the service sector rose to 55.4 in March from 53 in February — its second consecutive monthly gain. Much of the momentum came from a surge in new orders and business activity.

The recovery has been driven by sectors like manufacturing, which has consistently outpaced the rate of growth for the broader economy. But the institute’s report released on Monday indicated that services were beginning to catch up, and that employment in the sector was strengthening. Consumer spending has risen modestly in recent months, translating into stronger earnings and a slight increase in hiring.

It was the highest reading for the survey since May 2006, and it exceeded analysts’ expectations. The employment barometer was short of the break-even point, signaling that the service sector was still losing jobs, even though employment had gradually improved.

Exports rose significantly as American companies tapped into fast-paced growth in places like China and Canada. The backlog of orders also increased, reaching the highest level since 2007, suggesting growth might be robust in the months ahead.

A version of this article appears in print on  , Section B, Page 8 of the New York edition with the headline: Sales of U.S. Homes Rose Significantly in February. Order Reprints | Today’s Paper | Subscribe

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