Monday, November 23, 2009
WASHINGTON (AP) — First-time buyers seized on an expiring tax credit, low mortgage rates and falling prices to boost home sales in October to their highest level in 2 1/2 years.
Home sales are now nearly 37 percent above their bottom in January, though still 16 percent below their peak in 2005. At the current sales pace, there's a modest seven-month supply for sale. Bidding wars are occurring in some areas.
The report Monday from the National Association of Realtors pleased investors on Wall Street. And analysts said the homebuyer tax credit, which has been extended, will help sustain the housing market next year.
Yet the overall economy is likely to benefit only slightly from higher home sales. Too many factors are weighing on the fledgling recovery.
Home construction is weak. Foreclosures are rising. Job creation is slow. And consumers remain reluctant to spend.