U.S. existing home sales trend upward

December 22, 2010 03:11PM

Existing U.S. home sales began to climb in November, since bottoming out in July, according to a report released today by the National Association of Realtors. Existing home sales — including single-family homes, townhouses, condominiums and co-ops — rose 5.6 percent in November, from 4.43 million in October, but are 27.9 percent below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time homebuyer tax credit. But economists are optimistic about 2011. “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” said Lawrence Yun, chief economist for NAR. Yun also noted that homebuyers were responding to improved affordability conditions. “The relationship recently between mortgage interest rates, home prices and family income has been the most favorable on record for buying a home since we started measuring in 1970,” he said. “Therefore, the market is recovering and we should trend up to a healthy, sustainable level in 2011.” TRD