Good News in Housing: Home Sales Up

(Updated for mid-day change in shares prices).

WASHINGTON, D.C. (TheStreet) -- Existing home sales showed a strong gain in October, the seventh consecutive month of an upward trend, surging 10.1% for the month to 6.10 million units.

The rate was 23.5% above the October 2008 level and the highest since February 2007, when 6.55 million units were sold. The level topped market estimates of 5.7 million units, which was itself an optimistic outlook for a beaten-down sector.

The looming expiration of the first-time buyer tax credit, since extended, could have played a large part in driving up home sales across the country. Still, it was a bright piece of news for a Monday morning that followed a really tough previous week for the U.S. home market.

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Last week was a dismal one for the housing market, with the combination of poor housing permit data, higher foreclosure rates and weak earnings from D.R. Horton on Friday, beating down stocks in the sector.

However, analysts had seen some good news amidst the chaos, in terms of new orders and inventory backlogs, and historically low interest rates. Mortgage interest rates were the third-lowest since 1971 last month.

Indeed, several of the major homebuilders, including D.R. Horton, were up on Monday. Horton had rebounded from its 15% plummet on Friday, up 2% in the early afternoon. Meritage Homes(BHS Quote) was up 3.3% in the early afternoon; M/I Homes(MHO Quote) was up 2.9%; and Brookfield Homes(MTH Quote) was up 2%. Though some homebuilders were still evidencing the sector's uncertain fortunes, most notably,KB Homes(KBH Quote), which was down a little more than 1.5% in the afternoon.