Sales of previously-owned US homes jumped by 10.1% in October as buyers rushed to take advantage of tax credits, which have now been extended.

The National Association of Realtors said sales hit a seasonally adjusted annual rate of 6.1 million, up from a revised 5.54 million in September.

First-time buyer tax credits had been due to expire at the end of November, but have been extended until 30 April.

The jump in October home sales was the biggest in almost three years.

It was also much bigger than analysts had expected.

Low interest rates also helped to boost sales - the association said mortgage rates in October were at their third lowest since 1971.

‘Good numbers’

"Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November," said Lawrence Yun, the association’s chief economist.

“ These are good numbers… and to me they say very clearly the we’ve passed the low on housing ”
Hugh Johnson, Johnson Illington Advisors

He added that the supply of homes on the market was now at its lowest level for two-and-a-half years, "closer to the general balance between buyers and sellers".

Despite the upbeat figures, Mr Yun cautioned that sales could dip in the coming months.

"With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer."

Short-term volatility aside, many analysts now believe the housing market is on the road to recovery.

"These are good numbers… and to me they say very clearly the we’ve passed the low on housing," said Hugh Johnson at Johnson Illington Advisors.

Source: BBC News