US jobless claims rebounded last week to levels consistent with a trend of modest jobs growth seen in recent months, after unusual seasonal factors caused a sharp drop the week before. Last week's substantial rise in claims surprised economists who had predicted a slighter increase to 365,000. Claims data for the month of July are often unpredictable as a result of annual car plant shutdowns. Workers at these plants typically file for unemployment insurance during these temporary lay-offs. However this year several carmakers kept plants running in order to meet higher demand, making the data more difficult to adjust for seasonal factors, said Sara Kline, economist at Moody's Analytics. That said, the sharp rise in claims is disappointing. As the unusual pattern of auto plant shutdowns fades in the coming weeks, look for claims to stabilise. However, until hiring regains momentum, the labour market will struggle to create net new jobs," she said, adding that she did not anticipate accelerating jobs growth until late 2012. Claims have been trending near or above that level this spring. Jobs growth slowed to a rate of 91,000 a month from April to June, down from a robust 226,000 a month in the first quarter of 2012. Investors snap up rental properties Investors are helping to fill the gap left by many potential US homebuyers who are choosing to rent rather than buy homes, on the back of macroeconomic uncertainty, anxiety about job and salary prospects, negative equity on their existing homes, tight credit conditions and tougher mortgage requirements from banks. Rather than buying a home for themselves, or for renovation and resale, these investors - cash-rich individuals, private equity firms and property companies - are snapping up potential rental properties to service Americans who are unable to buy. All-cash sales edged up to 29 per cent of transactions in June from 28 per cent in May, according to NAR. Investors, who account for the bulk of cash sales, purchased 19 per cent of homes in June, up from 17 per cent in May. John Tashjian, principal at Centurion Real Estate Partners in New York, said: "There are some regions where investors have dramatically changed the landscape of the market, such as Miami, which went from dramatic oversupply of years and years of inventory to just a few months." The hope is that investor purchases will shrink the glut of distressed and delinquent properties and boost confidence, helping to spur the wider market. "The rental market is very strong," said Virginia Guest, a 36-year-old writer and property investor from Arizona. There are some great deals and you can make some good money as there are too many single family homes yet to be absorbed out there. Rental properties are thought to be a safer and better investment option than long-term Treasury bonds. Some regions in hard-hit states such as Arizona, California and Florida are giving rental yields of well above 5 per cent. There are some relatively small, unknown towns in Arizona where prices have reached the floor that have been overlooked by the big investors. I am making a 20 per cent annual return," said Ms Guest. Also on Thursday, the National Association of Realtors said existing home sales for the month of June declined 5.4 per cent to an annual rate of 4.37m. Although that was lower than the expected 4.65m rate, an upward revision of May's numbers to 4.62m was in line with recent data showing a tentative recovery in the US housing market. The June data were 4.5 per cent higher than the 4.18m-unit level seen in June 2011. For the best part of six years, the housing sector has been a source of weakness, with depressed prices and soured confidence in the market keeping potential homebuyers away. That picture has started to brighten with an uptick in home sales and signs that prices have hit a bottom, with those even in the most depressed markets starting to rise. "Despite the frictions related to obtaining mortgages, buyer interest remains solid," said Lawrence Yun, NAR chief economist. Inventory continues to shrink . . . this, in turn, is pushing up home prices in many markets. The price improvement also results from fewer distressed homes in the sales mix. Total housing inventory at the end of June fell 3.2 per cent to 2.39m existing homes available for sale, representing a 6.6-month supply at the current sales pace. While up from a 6.4-month supply in May, listed inventory is nearly a quarter lower than a year ago when there was a 9.1-month supply. The national median price for existing homes was $189,400 in June, up 7.9 per cent from a year ago. This marked four back-to-back monthly price increases from a year earlier, which last occurred in February to May of 2006. "That strength appears to reflect a shift in the mix away from sales of discounted "distressed" homes toward more traditional sales. Distressed homes accounted for an estimated 25 per cent of sales in June, down from 30 per cent 12 months earlier," said Jim O'Sullivan, chief US economist at High Frequency Economics. In spite of recent positive housing data, the pace of recovery is still slow. Millions of people are stuck with negative equity, owing more on their homes than they are worth and unable to sell. Analysts also fear a setback in the still-fragile economic recovery, against a backdrop of turbulence in Europe, a looming fiscal cliff in the US, high federal debt levels and flagging employment gains could easily reverse the uptick in home prices and the tentative US housing market comeback.