US home sales in surprise rise

| October 25, 2009
US home sales in surprise rise

The National Association of Realtors has revealed a surprise rise in sales of previously owned homes in the US for the month of September.

The industry body said sales surged 9.4% to an annual rate of 5.57 million in September, up from 5.09 million the previous month.

The rate far exceeded analysts expectations who had expected a rise to 5.35 million units.

The national median price for all housing types was $174,900 in the month – 8.5% lower compared with a year ago.

Many believe the latest figures point to a recovery within the US housing market.

The organisation’s chief economist, Lawrence Yun, comments: “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home.”

“We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year.”

However, the figures come just a few days after the Commerce Department revealed disappointing housing start figures for the month of September.

While construction of new US homes rose during the month, the figures were below economists’ expectations.

According to the Commerce Department, construction of new US homes rose 0.5% during the month to a seasonally adjusted annual rate of 590,000 properties – compared with the revised 587,000 units the previous month.

Analysts had expected the rate to exceed the 600,000 mark.

Meanwhile, applications for building permits, a barometer of future home construction, fell by 1.2% – the biggest fall since the 2.5% reported in April.

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