Sales of previously owned homes increase

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WASHINGTON — Sales of previously owned homes climbed in October, indicating gains in the real estate market are being sustained by cheap borrowing costs.

Purchases of existing houses, tabulated when a contract closes, increased 2.1 percent to a 4.79 million annual rate, exceeding the median forecast of economists surveyed by Bloomberg, figures from the National Association of Realtors showed today.

The median price rose from a year ago as inventories dropped to the lowest level in almost a decade.

Propelled by the lowest mortgage rates on record, cheaper properties and improved consumer sentiment, housing is one of the economy’s sources of strength.

The pace of October sales underscores what Federal Reserve Chairman Ben S. Bernanke said were “signs of improvement” in a market still hampered by strict bank lending standards.

The median price of an existing home climbed 11.1 percent from October 2011 to $178,600, today’s report showed.

The increase in October reflected a pickup in sales of more expensive properties, the group said.

The number of previously owned homes on the market decreased 1.4 percent to 2.14 million, the lowest since December 2002. At the current sales pace, it would take 5.4 months, the fewest since February 2006, to sell those houses compared with 5.6 months at the end of September.

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