Driven by the first-time buyer tax credit and low interest rates, existing-home sales rose 10.1 percent in October, according to the National Association of Realtors (NAR). In addition to month-over-month gains, October's results were 23.5 percent higher than the year-ago sales pace. Sales activity is now at the highest rate since February 2007.
Total housing inventory at the end of October fell 3.7 percent to a 7.0-month supply at the current sales pace, down from an 8.0-month supply in September. Unsold inventory totals are 14.9 percent below a year ago.
"The supply of homes on the market is now at the lowest level in over two and a half years -- we're getting closer to a general balance between buyers and sellers," said Lawrence Yun, NAR chief economist. The last time the relative housing inventory was this low was in February 2007.
NAR expects similarly positive sales results for November as many first-time buyers rushed to beat the tax credit deadline. The better news is that the tax credit was expanded and extended until April 30, allowing more time for first-time and repeat buyers to close on a new home.
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