Existing home sales at highest level since 2007
Sales activity rises more than expected in October, by 10.1%, to 6.1 million annual units.
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NEW YORK (CNNMoney.com) -- Existing home sales surged in October to the highest level in more than 2-1/2 years, according to a real estate industry report issued Monday.
The National Association of Realtors reported that existing home sales rose 10.1% last month to a seasonally adjusted annual rate of 6.1 million units, up from the downwardly revised rate of 5.54 million in September.
The sales beat forecasts of 5.7 million annual units, according to a consensus estimate of analysts compiled by Briefing.com, and were 23.5% above the 4.94 million-unit pace of 12 months ago.
Sales activity is the highest since February 2007, when the annual rate was 6.55 million.
The gain was likely due to an influx of buyers looking to take advantage of an $8,000 tax credit that the Obama administration made available for qualified first-time home buyers, the report said.
The tax credit was scheduled to expire at the end of November, but it has been extended to April 30 and expanded to include more home buyers.
"Many buyers have been rushing to beat the deadline ... and similarly robust sales may be occurring in November," NAR chief economist Lawrence Yun said in a statement.
But such a spike means December and early 2010 will probably see a "measurable decline before another surge in spring and early summer," Yun said.
Adam York, economist at Wells Fargo, agreed that "it's really a story of the tax credit, and a payback is inevitable."
Still, October's 10.1% gain "was a big, big jump," York said, and he expects only a 5% decline in the coming months.
"We will certainly will see some pickup into first part of next year," York said. "The expansion of the tax credit could bring in a whole new segment of people to the market."
Price and inventory. The median price of homes sold in October was $173,100, a 7.1% year-over-year drop. Distressed properties comprised 30% of the houses sold during the month.
The sales increase helped reduce some of the supply of homes on the market. Total housing inventory fell 3.7% to 3.57 million existing homes for sale. That's a 7-month supply, down from an 8-month supply in September.
Sales by property type. Single-family home sales rose 9.7% to a seasonally adjusted annual rate of 5.33 million in October from a pace of 4.86 million in September, and are 21.4% above the pace 12 months ago.
Condominium and co-op sales jumped 13.2% to a seasonally adjusted annual rate of 770,000 units, from 680,000 in September, and are 40.8% above October 2008's rate.
Sales by region. Total existing home sales rose the most in the Midwest, surging 14.4% in October to a pace of 1.43 million. That's 28.8% above a year ago.
In the Northeast, sales rose 11.6% to an annual level of 1.06 million; sales in the South jumped 12.7% to 2.30 million; and the West saw the smallest increase, up 1.6% to 1.31 million. 
