California Home Sales Jump 17%

Fueled by low mortgage rates and low inventories, the sales pace of existing U.S. homes rose an unexpectedly strong 6.1% in October from the previous month while the California sales rate jumped more than 17%, according to real estate reports released Monday.

The housing market has remained strong throughout the downturn; but even so, economists said they were encouraged by the numbers because combined with recent good consumer confidence and jobless claims numbers they paint a rosier picture of the economy.

“This is a part of the economy that has been strong all along,” said Mark Vitner, economist at Wachovia Securities in Charlotte, N.C.

In California last month, 579,240 detached homes were sold on a seasonally adjusted, annualized rate, according to the California Assn. of Realtors. The October median sales price reached $322,730, up only 0.1% from September but 22.7% higher than the same month last year. The figures do not include new homes or condominiums.

The inventory of unsold homes in California stood at a three-month supply in October and is on track to be the lowest annual figure on record, according to CAR chief economist Leslie Appleton-Young. A seven- to 10-month supply is typical.

Nationwide, sales of previously owned homes climbed to a seasonally adjusted annual rate of 5.77 million units from an upwardly revised 5.44 million unit pace in September, according to the National Assn. of Realtors.