) -- Existing home sales in the U.S. rose in November for the third consecutive month to the highest level in more than two years, according to the latest data from the
National Association of Realtors
The November figure rose 7.4% from a month ago to an annual rate of 6.54 million -- a number not seen since February 2007 -- up from 6.1 million in October. Compared to a year ago, November sales grew by 44%.
The increase surpassed economists' estimates. There had been an expectation that while home sales would rise for the third straight month, the pace of growth might slow due to the rush of home purchases in October ahead of the expected expiration of the first-time home-buyer tax credit. November's 7.4% increase was below October's record-setting rate of more than 10%.
Though the housing market has been rebounding, the short-term profitability outlook remains uncertain for major homebuilders, including
Historically low interest rates have helped kick-start the depressed U.S. housing market. Still, most sector analysts believe the larger macroeconomic picture, particularly job growth, is critical for a
true turnaround in the housing sector in 2010.
Lawrence Yun, chief economist at the National Association of Realtors, said rookie home buyers drove the November increase. "This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead," Yun said.
Still, with the slow winter and holiday season, Yun's group doesn't believe home sales will maintain the current pace. "We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010," Yun said.
Questions linger as to whether recent appreciation in home prices is an indicator of the housing market turning the corner, or if
home prices could be headed for a double dip in 2010.
Homebuilders, including Toll Brothers, have recently indicated that they expect the housing recovery to be slow and frustrating as opposed to full speed and straight ahead.
-Reported by Eric Rosenbaum in New York.
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