Sales of existing homes surged for the third straight month.

Home buyers in November rushed to qualify for what they thought would be an expiring federal tax credit, boosting resales of U.S. homes by 7.4% to a 6.54 million seasonally adjusted annual rate.  The sales pace was the highest since February 2007 and was the third-straight large increase in existing home sales. Sales are up 28% since August.  Sales are up a record 44.1% in the past year, reflecting a recovery in the housing market after the sharpest downturn in decades. Sales are now off just 10% from their peak.
It seems that U.S. home buyers are continuing to take advantage of the (still) very affordable housing conditions and the various tax incentives in place.  While low mortgage rates and the home buyer tax credit will support housing demand into the early part of 2010, further gains in sales will depend on improvement in the job market.  Buyers were hurrying in November to finalize sales ahead of the November 30 expiration for the tax credit, now to find that the tax credit is extended to June and expanded to include repeat buyers.
More than half of the sales in November were to first-time buyers.  About 2 million first-time buyers have taken advantage of the tax credit.  Housing experts expect an additional 2.4 million to take advantage of the expanded and extended tax credit.
The median sales price in November was $172,600 (yes, you read it right), down 4.3% in the past year, the smallest year-over-year decline in two years.
The above news released today forced the 10-year bond yield up to 3.74%, the highest since August 13, over four months ago.  As a result rates are up about .25% from Friday on the usual knee-jerk reaction to the news.
Have a great Holiday everyone!
Tom