After soaring in October, sales of previously owned homes rose sharply again in November, climbing to their strongest pace since early 2007, according to a report from a leading trade association released Tuesday.

Existing home sales rose 7.4 percent in November to 6.54 million annualized units from a 6.09 million annualized pace in October according to a report issued by the National Association of Realtors. The November home sales pace was the highest since February 2007. Existing home sales in November were 44.1 percent higher than the 4.54 million-unit pace posted in November 2008.

November’s strong home sales numbers reflect a surge of first-time buyers taking advantage of the homebuyer tax credit. According to the Association’s practitioner survey for November, first-time buyers purchased 51 percent of homes in November. The first-time homebuyer tax credit was supposed to expire in November but was extended and expanded, and buyers now have until June to take advantage of the tax credit.

The home sales report also shows the home prices may be stabilizing. The median price of existing homes sold in November was $172,600, 4.3 percent less from a year earlier. November’s price drop was an improvement over the year over year 7.1 percent price drop registered in October.

On the supply side, the inventory of existing homes available for sale dropped 1.3 percent to 3.518 million homes compared to a month earlier. As a result, the months’ supply fell to 6.5 in November compared to a 7 months’ supply in October. A 6.5 months’ supply is approaching the 5 to 6 months’ supply range that is generally associated with a favorably balanced home buying/home selling marketplace. The months’ supply measures the number of months it would take to deplete the entire inventory of existing homes at the current sales pace.

Regionally, the West experienced the strongest gains in home sales followed by the Midwest, Northeast and South. Existing home sales rose 10.6 percent in the West compared to the previously month while sales in the Midwest, Northeast and South rose by 8.4 percent, 6.6 percent and 4.8 percent, respectively.

According to the association, foreclosures sales comprised 33 percent of total sales in November compared to a 30 percent share of total sales posted in October.

The November home sales report is consistent with other major housing reports, such as a large jump in new residential construction in November and strong gains new home sales posted in October, that the U.S. housing sector is closing 2009 on a high note. The recent vigor in the major housing measures can be attributed to the homebuyer tax credit and historically low mortgage rates.

A continuing concern is that once the tax credit is finally (permanently) lifted in mid-2010, the housing recovery could stumble. However, it is possible that some of today’s negative influences, like monthly job losses and falling home prices, would improve by then and exert a positive influence on housing activity, keeping the recovery on track.