U.S. home sales surge 10.1% in October

WASHINGTON, Nov. 23 (Xinhua) -- U.S. existing home sales increased 10.1 percent in October, reaching their highest record since July 2007, according to data released by the U.S. National Association of Realtors (NAR) on Monday.

Existing-home sales -- including single-family, town homes, condominiums and co-ops -- surged to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity has been at the highest pace since February 2007 when it hit 6.55 million.

Driven by the first-time buyer tax credit, the October housing sales outpaced economists expectation.

Lawrence Yun, NAR chief economist, was surprised at the size of the gain. "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," he said. "With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer."

A federal tax credit of up to 8,000 U.S. dollars for first-time homebuyers has helped stoke sales this year. The incentive was set to expire at the end of this month, but the NAR and other housing groups successfully lobbied to get the credit extended. Potential buyers have until April 30 to have a contract in place.

Historically low interest rates also are boosting the market. "Mortgage interest rates last month were the third lowest on record dating back to 1971," Yun noted.

In the latest currency policy meeting, the Federal Reserve announced keeping the interest rate at the near zero level for an extended period.

The National Association of Realtors is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.