October Home Sales Rise 10.1%
Home sales surged last month to the highest level in 2 1/2 years as first-time buyers were rushing to take advantage of the expiring government tax credit.
Sales of pre-existing homes rose 10.1 percent in October to a seasonally adjusted rate of 6.1 million according to the National Association of Realtors on Monday. The pace set in September was 5.64 million.
First –time buyers are eligible for an $8,000 tax credit that was originally set to run through November 30, but congress extended the program to April 30 to help stimulate the floundering housing market. In addition, buyers that have owned their home for at least five years are qualified for $6,500 towards a home purchase.
The October figures well surpassed the economist forecasts of a 2.3 percent increase. The numbers were likely to have been highly impacted by the previous pending deadline, with home buyers scurrying to get in on the government issued incentives.
The economists are saying that buyers will likely go back into hibernation until the April deadline approaches. Currently there are 3.6 million unsold homes on the market, which is enough for the next seven months at the current sales pace.
While sales soared, the median price of homes sold in October was down by 7.1 percent from the same month last year and off 1.6 percent from September at $173,100.
Experts forecast that the price of homes will continue to fall as more and more foreclosures hit the market. States that were hit the hardest by the slumping market, California, Arizona, Florida and Nevada, accounted for 43 percent of new foreclosures according to reports last week from the Mortgage Bankers Association.
Create E-mail AlertRelated Categories
Economic DataGeneral News
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
