The National Association of Realtors recently reported that existing home sales in October were up 10.1% October to an annual rate of 6.1 million homes. There is good and (potentially) not so good news in this announcement but we will take any good news for the housing sector at this point since the housing market needs all of the help it can get.

The good news is that this sales level is well beyond the 2.3% increase predicted by analysts surveyed by Bloomberg News and is the highest sales level seen since February, 2007 when the housing sector started to crater. The not so good news is that most housing industry folks feel that the sales frenzy was largely fueled by the $8,000 Home Buyer Tax Credit which was set to expire in November of this year but was since extended on November 6th by President Obama.

Housing and Retail market analysts will closely monitor home sales activity to see what affect home sales may have on retail sales. The correlation stems from the fact that folks who buy homes often go out and buy furniture to furnish their new home, appliances for the kitchen, and other necessary products that will boost retail sales for retailers who sell in to this home products niche.

Other good news that came out of a strong month for existing home sales is that inventories of unsold homes continued to shrink and prices while still low fell by the lowest amount in more than a year. While sales of lower priced homes continued to dominate, the number of foreclosed homes that sold may be dwindling somewhat, or, competitive bidding on foreclosed homes may be driving up slightly prices for these homes.

Whatever the case, strong home sales are a good thing and we continue to cheer any and all good news for the beleaguered housing sector.

This entry was posted on Wednesday, December 2nd, 2009 at 5:00 am and is filed under In The News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.