Strong improvement reported in two home markets

Construction worker Elabert Salazar works on the frame Construction worker Elabert Salazar works on the frame for a new home this past week in Chula Vista, Calif. Reports on two parts of the housing market -- existing home sales and builder sentiment -- indicate it is strengthening. (Nov. 16, 2012) Photo Credit: AP

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U.S. sales of previously occupied homes rose solidly in October, helped by improvement in the job market and cheap mortgages. At the same time, U.S. home builders expressed the strongest confidence in the new home market in 6½ years.

In a report released in Washington, D.C., the National Association of Realtors says existing home 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.

Superstorm Sandy delayed some sales in the Northeast, the Realtors' group said. Sales fell 1.7 percent, the only region to show a decline. Most of the drop was due to the storm, but those sales will likely be completed in future months, the group said.

In a report released in Los Angeles, the National Association of Home Builders/Wells Fargo builder sentiment index increased to 46, up from 41 in October. That's the highest reading since May 2006, just before the housing bubble burst.

Readings below 50 suggest negative sentiment about the housing market. The index last reached that level in April 2006. Still it has been trending higher since October 2011, when it stood at 17.

A measure of current sales conditions rose this month by 8 points to 49, the highest level since May 2006.

The survey is based on responses from 417 builders.

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