New figures show that sales of previously-owned US homes rose in October at a faster than expected pace as buyers rushed to take advantage of a tax break.
Property industry group the National Association of Realtors said sales surged a record 10.1% to an annual rate of 6.1 million units, the highest since February 2007. This compared with a downwardly revised 5.54 million units in September.
Analysts had expected October sales to jump to 5.7 million units. Compared with October last year, home sales were up by a record 23.5%.
'Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,' said association chief economist Lawrence Yun. He said that, with such a sales spike, there should be declines in December and early next year before further rises in spring.
Many prospective buyers had been rushing to qualify for an $8,000 tax credit for first time home buyers. Congress, however, voted to extend the credit and expand it to include other home purchases as well.
Home prices remained under pressure. The median existing home price was down 7.1% from a year ago to $173,100 in October. The association said sales prices had been distorted by distressed properties, which accounted for 30% of sales in October.
The glut of unsold homes fell in October, in a positive sign for the sector at the heart of the global financial crisis. Total housing inventory at the end of October fell 3.7% to 3.57 million units, a seven-month supply at current sales levels and the lowest level since early 2007.