Home sales likely rose in November to highest level since February 2007, spurred by tax credit

Home sales likely rose again in November

WASHINGTON — Home resales are expected to have risen to their highest level in nearly three years in November, as an extraordinary level of federal support has pulled the housing market back from the worst downturn since the Great Depression.

Economists project home sales rose 2.5 percent to a seasonally adjusted annual rate of 6.25 million, up from 6.1 million in October, according to Thomson Reuters. If accurate, it would be the third-straight increase and the best month for home sales since February 2007.

The National Association of Realtors’ report is scheduled for release at 10 a.m. EST Tuesday.

“Things are stabilizing,” said Pete Flint, chief executive of real estate Web site Trulia.com. “There is a significant amount of buyer interest out there.”

One encouraging sign, at least for sellers, is that prices are stabilizing and rising in some areas. About one in five sellers who listed their homes at the start of December cut their prices at least once, down from about one in four during most of the year.

Buyers last month were racing to finish their sales before the original expiration date of a tax credit. It was originally scheduled to expire on Nov. 30, but Congress decided last month to renew and expand it.

In addition to a credit of up to $8,000 for first-time buyers, homeowners who have lived in their current properties for at least five years can now claim a tax credit of up to $6,500 if they relocate. To qualify, buyers must sign a purchase agreement by April 30.

But now that the deadline pressure has lifted, many analysts expect sales to drop during the winter months and recover in the spring.

“Buyers have no sense of urgency now,” said Gary DeRosa, an agent with ZipRealty Inc. in Seattle.

And many experts caution that the pain for the housing market isn’t over. A record 14 percent of homeowners with a mortgage are either behind on their payments or in foreclosure.

Home prices are likely to start falling again as foreclosures make up a larger share of sales during the winter months, when sellers generally keep their homes off the market.

Prices fell 0.7 percent from September to October, according to a report released Monday by real estate data company First American CoreLogic. The company forecasts prices in large cities will fall about 4 percent before hitting bottom in March.

AP Real Estate Writer Alex Veiga contributed to this report from Los Angeles.

(This version CORRECTS Corrects day to Tuesday in 3rd graf. Will be led following 10 a.m. EST data release. Moving on general news and financial services.)