Monday, December 31, 2007

Existing home sales edge up from record low

To close the year with a positive note, this news is a relieve for the Real Estate market.

Existing home sales edge up from record low
By Emily Kaiser
Mon Dec 31, 4:36 PM ET

WASHINGTON (Reuters) - The pace of existing U.S. home sales edged up in November from a record low, according to a report on Monday that offered some tentative signs of stabilization in the still-ailing housing market.

Sales of previously owned homes rose 0.4 percent to a 5 million-unit annual rate, the first increase in nine months, the National Association of Realtors said.

Economists and investors breathed a small sigh of relief that the glut of unsold homes was smaller than a month earlier, dipping to 10.3 months' supply at November's sales pace from 10.7 in October, as falling prices spurred stronger demand.

Wall Street economists had expected home resales to hold steady at October's previously reported 4.97 million-unit pace. October sales were revised up to a 4.98 million unit rate, still the lowest on records dating to 1999.

The data initially helped stocks trim losses, while weighing on prices for U.S. government bonds. However, the moves were short-live and major stock indexes closed down, with the blue chip Dow Jones industrial index (.DJI) falling 101 points to 13,264.

"The second consecutive month of steady sales seemingly hints at a possible bottom in housing demand," said Haseeb Ahmed, an economist with JPMorgan in New York. However, Ahmed said the stability was "quite possibly temporary."

While the inventory of unsold homes moved down, it remained elevated at 4.27 million homes as the ongoing turmoil in the credit markets thinned the pool of potential buyers, suggesting it may be some time before the market regains solid footing.

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