Business and Finance

WASHINGTON–Home resales surged in the United States 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 extended the credit to ensure the market could sustain its recovery.

"Things are stabilizing," said Pete Flint, chief executive of real estate website trulia.com. "There is a significant amount of buyer interest out there.”

About two million homebuyers have taken advantage of the credit so far, the National Association of Realtors said. The group forecasts that another 2.4 million will use it by the middle of next year. First-time buyers made up about half of all transactions last month, driving sales up 44 per cent above last year’s levels, a record jump.

November’s sales rose 7.4 per cent 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 had been expected to rise to an annual pace of 6.25 million, according to economists surveyed by Thomson Reuters.

Sales are now up 46 per cent from the bottom in January, but down 10 per cent from the peak more than four years ago. The inventory of unsold homes fell about 1 per cent to 3.5 million. That’s a healthy 6.5 month supply, the lowest level in three years.

The median sales price was $172,600 (U.S.), down 4.3 per cent from a year earlier, and up 0.2 per cent from October. Analysts said the new tax credit deadline means sales will drop during the winter months and recover in the spring.

Associated Press

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