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November 26, 2011

US Existing Home Sales On the Rise
The National Association of Realtors reported on Monday that sales of existing US homes picked up slightly in October, providing a bit of much-needed optimism for the nation's long-beleaguered housing market. The NAR said that sales of previously owned homes rose 1.4 percent last month to a seasonally adjusted annual pace of 4.97 million units, after a downwardly revised pace of 4.90 million in September.

The report also showed the number of homes listed for sale declined last month, alleviating concerns about a potential flood of foreclosures which analysts say is looming as banks ramp up their foreclosure procedures upon reaching settlements over allegations of improperly seizing homes.

Not all the news in the NAR report was good, however, as contract failures rose to 33 percent from just 18 percent in the prior month, as buyers continue to back out of purchases after appraisers value homes at less than the agreed purchase price. Contact failures can also be the result of declined mortgage applications, loss of employment for the buyer, or other problems related to the home inspection.

According to NAR chief economist Lawrence Yun, other factors that contributed to an increase in failed purchase contracts include a disruption in the National Flood Insurance Program and lower loan limits for conventional mortgages, which can inflate interest rates charged to even the most creditworthy of American consumers, making a home too expensive to afford.

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