October Home Sales Spike Significantly

The National Association of Realtors (NAR) announced today that existing home sales in October rose significantly, rising 10.1% in October compared to the month before. An increase of this level has not been seen since February 2007, before the collapse of the housing bubble. Analysts with Bloomberg news were expecting a gain of only 2.3%.

While many factors can be attributed to the large rise in existing home sales, such as the extension of the tax credit, significant inventory, and low prices, it's hard to imagine the prices remaining this high for an extended period of time. Furthermore, the article pointed out an important caveat: with one in ten homeowners behind on their mortgage, it's hard to be sure that this spike will either be sustained or will provide the boost to the rest of the economy that many analysts are hoping for. The next few months will prove extremely important in proving whether or not the market is really on the rise again, or whether the changes are temporary or seasonal.