WASHINGTON -- U.S. resales of previously occupied homes rose solidly in October, helped by improvement in the job market and record-low mortgage rates.
The increase along with a jump in homebuilder confidence this month suggests the housing market continues to recover.
The National Association of Realtors (NAR) said Monday that sales rose 2.1 percent to a seasonally adjusted annual rate of 4.79 million. That's up from 4.69 million in September, which was revised lower.
The sales pace is roughly 11 percent higher than a year ago. But it remains below the more than 5.5 million that economists consider consistent with a healthy market.
As the economy slowly recovers, more people have started looking to buy homes or rent apartments.
Prices are steadily climbing, while mortgage rates have been low all year.
At the same time, rents are rising, making the purchase of a single-family home or condominium more attractive.
“Altogether, the report is encouraging,” said Michael Gapen, an economist at Barclays Capital (NYSE: BCS).
“Our view is that housing is in a recovery phase,” he added, though it will be restrained by limited credit and modest job gains.
A separate report Monday showed confidence among homebuilders rose this month to its highest level in six and a half years.
The increase was driven by strong demand for newly built homes and growing optimism about conditions next year.
The NAR said Superstorm Sandy delayed some sales of previously occupied homes in the Northeast.
Resales fell 1.7 percent there, the only region to show a decline. Those resales will likely be completed in future months, the group said.
The median price for previously occupied homes increased 11.1 percent from a year ago to $178,600, the NAR said.
A decline in the number of homes available for sale is helping push prices higher.
There were only 2.14 million homes available for sale at the end of the month, the lowest supply in 10 years.
It would take only 5.4 months to exhaust that supply at the current sales pace. That's the lowest sales-to-inventory ratio since February 2006.
Prices are also benefiting from the mix of homes being sold.
Resales of homes priced at $500,000 and above have jumped more than 40 percent in the past year.
Resales of homes and condominiums that cost less than $100,000 fell 0.6 percent.
There have been other positive signals from the housing market.
Applications for mortgage loans to buy homes jumped 11 percent in the week ended Nov. 9, compared with a week earlier, the Mortgage Bankers' Association said last week.
Purchase applications are up 22 percent in the past year.
Foreclosures are slowing.
The number of properties that began the foreclosure process in the first 10 months of the year fell 8 percent compared with the same period last year, RealtyTrac said last week.
And builders broke ground on new homes and apartments at the fastest pace in more than four years in September. The jump could help boost the economy and hiring.
Still, the market has a long way back to full health. Many potential home buyers cannot meet stricter lending standards or produce larger down payments required by banks.
That can be a particular problem for first-time homebuyers. They accounted for 31 percent of sales in October, down slightly from September and below the 40 percent that is common in a healthy market.
Federal Reserve Chairman Ben Bernanke said Thursday that banks' overly tight lending standards may be preventing sales and holding back the U.S. economy.