After surging 10% in October, sales of existing homes jumped again in November rising by 7.4%. The level of existing home sales hit the highest level since February 2007, a sign that perhaps the housing market is gaining strength. Sales are now up 46 percent from the bottom in January, but still down 10 percent from the peak more than four years ago.

The surprisingly strong sales figures were spurred in large part by low interest rates and first-time home buyers looking to take advantage of the $8,000 federal tax credit. About 2 million homebuyers have taken advantage of the $8,000 tax credit so far, according to the National Association of Realtors. First-time buyers made up about half of all transactions last month. The group forecasts that another 2.4 million people will use the tax credit by the middle of next year.

However, the housing market still faces strong headwinds. Unemployment is still high and employers are slow to re-hire because economic growth is weaker than expected. The government reported today that the economy grew at only a 2.2% rate in the third quarter as compared to the earlier estimate of 2.8%.

Many experts warn that hundreds of thousands of foreclosed properties have yet to be put up for sale. In addition, mortgage defaults are still setting records and lenders are regularly rejecting applications from borrowers who don’t have outstanding credit and a large down payment. The jury is still out on whether the housing market has actually bottomed.