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Existing Home Sales Jump a Record 10 Percent

The National Association of Realtors released its report on existing home sales in October on Thursday, which showed a record 10 percent jump in the index after falling 1.8 percent in September. The median forecast among economists in a recent survey called for sales to fall 1 percent. The October increase was the highest since the NAR began releasing the monthly index in 2001.

The latest report eases concerns that the housing market will struggle well into next year after federal tax credits for homebuyers expired in April. Low mortgage rates and rock-bottom prices appear to have lured buyers in, as the housing market appears to possibly be stabilizing. Still, with the continued trend of foreclosures and unemployment hovering around 10 percent, the housing market will likely take years to rebound completely.

Analysts see conditions that they believe will lead to a nice rate of growth in housing in the coming months. They warn that the numbers will still appear low relative to housing's boom years, but expect a solid rate of growth to be evident.

US stocks responded favorably to the report, adding to gains made Wednesday. The Standard & Poor's 500 climbed 0.7 percent to 1,214.57 as of 10:30 AM ET. Yields on US Treasuries, which move inversely to their price, also rose, with the yield on a 10-year note gaining 3 percent from 2.97 percent late Wednesday.

A In a separate report, the US Labor Department said that initial unemployment claims are down over the last month. There were an average of 431,000 new claims per week for the month ended November 27th, the lowest one-month average since August 2008, according to the report. After hitting a 2 year low two weeks ago, claims did rise by 26,000, more than had been predicted, to 436,000.

The NAR's home sales report showed that 3 of the 4 US regions enjoyed an increase in sales in October, led by the Midwest with a gain of 27 percent. The Northeast saw a gain of 20 percent and the South 7.1 percent, while sales dropped 0.4 percent in the West.leased the weekly mortgage rate report a day early this week because of the Thanksgiving Day holiday, and rates were little changed as a result.

December 5, 2010

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