Despite predictions to the contrary, existing-home sales saw a jump in August, according to data released today by the National Association of Realtors. Sales were up 7.7% compared to July’s reading and up 18.6% on an annual basis, to reach a seasonally adjusted annual rate of 5.03 million units.

While plunging mortgage applications and dropping numbers of pending home sales in July had left economists feeling unhopeful, the surprise improvement came from investors, whose share of sales rose from 18% in July to 22% in August. Sales to non-investors also gained, but by a smaller 2.5%.

While the trend is likely to continue in the coming months thanks to the recent surge in defaults, how much an influx of investors will impact the home building industry remains to be seen. "Some investors are trying to flip [homes] over, but I think most are trying to wait it out and sell them later on," said Patrick Newport, U.S. economist at IHS Global Insight, on a call with Builder. "I’m not sure it will have much of an impact on builders, because over the long run what will really drive the sales numbers will be demographics: growth in population and growth rates of households."

The place Newport believes the trend will have the most influence in housing is in keeping prices low. And the influence of investors’ bargain hunting was certainly evident in August’s report, wherein homes at risk of foreclosure made up 31% of sales, an increase from 29% in July. Compared to a year ago, the median price for an existing home was down 5.1% in August, and the average price dropped 4.0%.

The jump in activity also brought down inventory by a full point to an 8.5 months’ supply at the current pace.

While all four regions shared in the improvements, the Northeast saw the smallest increase, partly due to the trouble that area saw last month from Hurricane Irene. Existing-home sales rose 2.7% for the month, but stood a full 10.0% above where they were the year before.

The Midwest gained 3.8% from the previous month and was 26.7% above August 2010. The South saw an increase of 5.4% on a monthly basis and 16.9% on a yearly basis. The West jumped 18.3% from July and was up 20.6% from the previous year. All areas saw price declines on an annual basis.

Claire Easley is a senior editor at Builder.

Learn more about markets featured in this article: Greenville, SC.