US home sales unexpectedly higher

Sales of previously-owned US homes unexpectedly surged last month to
the highest level in more than two years. The National Association of
Realtors said sales rose 9.4 % to an annual rate of 5.57 million
last month, up from a rate of 5.09 million in August. Analysts had
been expecting a rise in the seasonally adjusted annual rate to 5.35
million in September. The average sale price dropped 8.5 % from a
year ago to $174 , 900 (£106 ,937) , the smallest annual drop in 13
months. 'Temporary dip' Some will see the data as more evidence of a
US housing recovery. However, much of the gain was attributed to a
tax credit that is due to expire on 1 December. "Much of the momentum
is from people responding to the first-time buyer tax credit, which
is freeing many sellers to make a trade and buy another home," said
the association's chief economist Lawrence Yun. "We are hopeful the
tax credit will be extended and possibly expanded to more buyers, at
least through the middle of next year." If the tax credit is not
extended, then house sales may fall, analysts said. "If the credit is
allowed to expire, home sales will probably dip temporarily in the
following months," said Brian Wesbury at First Trust Portfolios.
"However, the underlying trend will be upward over the next couple of
years as potential homebuyers no longer need to fear widespread deep
national home price declines. "