In what can be called the biggest gain since July 2003, home resales in the U.S. rose 5.5 percent in September, aided by foreclosure-driven declines in prices, indicating a hopeful sign for a housing market mired in a long slump.

The National Association of Realtors in Washington said on Friday that purchases of existing homes jumped a 5.18 million annual pace, the highest level in a year.

Economist Lawrence Yun said in a press conference: “In terms of sales, I think we have bottomed out. The first step to housing-market stabilization is rising home sales. Hopefully, this trend can continue.”

The surprisingly large jump in sales pushed the inventory of unsold homes to the lowest since February, down by 1.6 percent to 4.27 million, or a 9.9 months’ supply at the current pace.

The median national home price declined 9 percent from a year ago to $191,600, the lowest level since April 2004.

Commenting on the developments, Adam York, an economist at Wachovia Corp. in Charlotte, North Carolina, said: “This may be a temporary bump as we clear out these foreclosed properties. As the meltdown really hits these figures in late October and November, that’s when we could see some retracement.”

However, a Reuter’s poll taken October 21-24 found economists expect prices to continue to fall through next year. The median forecast from the survey was for a 15 percent drop this year, and a 6.4 percent fall in 2009. Economists expect prices to turn up by a meager 1 percent in 2010.

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