casper
11-23-2009, 09:10 PM
Home sales at 2-1/2 year high
By Lucia Mutikani
WASHINGTON - Sales of previously owned U.S. homes jumped last month to their highest level in more than 2-1/2 years, but a fall in an economic activity gauge was a reminder recovery from recession would be patchy.
The National Association of Realtors said on Monday sales of existing home sales surged a record 10.1 percent month-over-month to an annual rate of 6.10 million units as buyers rushed to take advantage of a popular tax credit for first-time buyers that had been scheduled to end this month.
It was the highest since February 2007 and beat market expectations for a 5.70 million-unit pace. Sales in September were at a 5.54 million-unit rate.
"Although the data are biased higher from policy measures, we do believe this sharp gain signals pent up demand and a willingness to purchase homes, which is a good sign for the sustainability of the housing recovery," said Michelle Meyer, an economist at Barclays Capital in New York.
U.S. stock indexes extended gains on the housing data, which shifted attention away from an earlier report from the
Federal Reserve Bank of Chicago showing its National Activity Index slid to -1.08 from -1.01 in September.
U.S. Treasury debt prices eased as the market prepared for another huge dose of supply this week.
The National Activity Index's three-month moving average, CFNAI-MA3, decreased to -0.91 in October from -0.67 in September, declining for the first time in 2009.
According to the Chicago Fed, a move below -0.70 in the three-month moving average following a period of economic expansion indicates an increasing likelihood a recession has begun.
This development will likely feed into fears the economic recovery that started in the third quarter may lose some momentum once government stimulus wanes, given high unemployment which is crimping consumer spending.
Analysts are cautiously hoping a sustained housing market recovery will help improve the psychology of households, which has been shaken by an unemployment rate of 10.2 percent, the highest in 26-1/2 years.
EXISTING HOME SALES BOTTOMED
The NAR said data on Monday, which showed broad-based gains in the largest segment of the housing market, was proof that the decline in purchases of existing homes had bottomed.
"Home prices are almost there. We are seeing a less of a decline in house values," said Lawrence Yun, NAR's chief economist.
By Lucia Mutikani
WASHINGTON - Sales of previously owned U.S. homes jumped last month to their highest level in more than 2-1/2 years, but a fall in an economic activity gauge was a reminder recovery from recession would be patchy.
The National Association of Realtors said on Monday sales of existing home sales surged a record 10.1 percent month-over-month to an annual rate of 6.10 million units as buyers rushed to take advantage of a popular tax credit for first-time buyers that had been scheduled to end this month.
It was the highest since February 2007 and beat market expectations for a 5.70 million-unit pace. Sales in September were at a 5.54 million-unit rate.
"Although the data are biased higher from policy measures, we do believe this sharp gain signals pent up demand and a willingness to purchase homes, which is a good sign for the sustainability of the housing recovery," said Michelle Meyer, an economist at Barclays Capital in New York.
U.S. stock indexes extended gains on the housing data, which shifted attention away from an earlier report from the
Federal Reserve Bank of Chicago showing its National Activity Index slid to -1.08 from -1.01 in September.
U.S. Treasury debt prices eased as the market prepared for another huge dose of supply this week.
The National Activity Index's three-month moving average, CFNAI-MA3, decreased to -0.91 in October from -0.67 in September, declining for the first time in 2009.
According to the Chicago Fed, a move below -0.70 in the three-month moving average following a period of economic expansion indicates an increasing likelihood a recession has begun.
This development will likely feed into fears the economic recovery that started in the third quarter may lose some momentum once government stimulus wanes, given high unemployment which is crimping consumer spending.
Analysts are cautiously hoping a sustained housing market recovery will help improve the psychology of households, which has been shaken by an unemployment rate of 10.2 percent, the highest in 26-1/2 years.
EXISTING HOME SALES BOTTOMED
The NAR said data on Monday, which showed broad-based gains in the largest segment of the housing market, was proof that the decline in purchases of existing homes had bottomed.
"Home prices are almost there. We are seeing a less of a decline in house values," said Lawrence Yun, NAR's chief economist.