New U.S. home sales in June posted the fastest increase in more than eight years as buyers took advantage of bargain prices, low interest rates and a federal tax credit for first-time homeowners.

While home prices are still falling, the figures released yesterday were another sign the housing market is finally bouncing back.

Earlier this month, the government reported that new home construction rose to the highest level since last fall. And data out last week showed home resales rose almost four per cent in June, the third straight monthly increase.

“The worst of the housing recession ... is now behind us,” said David Resler, chief economist at Nomura Securities. “We’re turning the corner toward increased activity in housing.”

Shares of big homebuilders soared on the news, with Beazer Homes USA up by more than 13 per cent and Hovnanian Enterprises rising eight per cent in afternoon trading.

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