U.S. home sales jump

Sales of existing U.S. homes rose9.4 per cent in September as Americans rushed to take advantage of a soon-to-expire tax credit forfirst-time buyers.

The National Association of Realtors said sales last month rose to a seasonally adjusted annual rate of 5.57 million the highest number in more than two years.

That beat the consensus forecast of 5.35 million, according to estimates compiled by Thomson Reuters.

An $8,000 US tax credit for first-time buyers is due to expire at the end of November. Congress is considering an extension,but adecision has not been made.

Despite the rosy-looking numbers, analysts say the U.S. housing market still faces formidable hurdles.

"Even if the first-time homebuyer tax credit deadline is extended the market faces numerous headwinds, including a likely continued increase in foreclosures, that will limit the recovery well into next year," said BMO NesbitBurns economist Sal Guatieri.

The median price of a U.S. resale in September fell to $174,900 US. That's down 8.5 per cent from a year ago,the smallest year-over-year dropin 13 months.

About 3.63 million homes were available for sale at the end of September the lowest number in 2 years. That's a little less than an eight-month supply at the current sales pace.

First-time buyers accounted for about 45 per cent of home sales in the past year, the National Association of Realtors said.

Almost three in 10 homes soldlast month 29 per cent were classified as distressed properties,meaning the previous owners had failed to meet mortgage commitments or were selling under financial pressure.