Home sales surge in November

WASHINGTON (AP) -- Home resales surged last month to the highest level in nearly three years, reflecting an extraordinary level of federal support that has pulled the housing market back from the worst downturn since the Great Depression. Buyers were racing to complete their sales before the original expiration date of a tax credit for first-time buyers that was scheduled to expire Nov. 30. Last month, Congress decided to extend and expand the credit to ensure the housing market could sustain its recovery. About 2 million homebuyers have taken advantage of the credit so far, accoding to the National Association of Realtors. The group forecasts that another 2.4 million will use it by the middle of next year. November's sales rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million, from a downwardly revised pace of 6.09 million in October, the Realtors group said. It was the highest level since February 2007. Sales are now up 46 percent from the bottom in January. The housing market recovery, however, is still facing strong headwinds. Unemployment is high and employers are going to be slow to rehire because economic growth is weaker than expected. What's more, mortgage defaults are still setting records, and lenders are regularly rejecting applications from borrowers who don't have good credit or enough money for a down payment. Many experts warn that hundreds of thousands of foreclosed properties have yet to be put up for sale. Plenty of traditional sellers are also keeping their homes off the market, hoping for a better price. "When they start thinking they can sell them, we could see a surge in homes for sale," wrote Joel Naroff, president of Naroff Economic Advisors. Published: Tue, Dec 29, 2009

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