Page last updated at 15:54 GMT, Monday, 25 January 2010

US home sales see steep drop in December

For sale sign in Virginia
The first-time buyer tax credit has boosted sales

Sales of previously-owned US homes fell 16.7% in December, the National Association of Realtors (NAR) has said.

Sales had risen from September to November as first-time buyers took advantage of tax credits.

The decline in December was expected as buyers rushed to complete deals before the original 30 November deadline.

The first-time buyer tax credit has since been extended until 30 April, and the NAR said there was likely to be another surge in sales in the spring.

December sales fell to a seasonally-adjusted annual rate of 5.45 million from 6.54 million in November, but are 15% higher than the level seen in December 2008.

The average sale price of a previously-owned home was $178,300 (£110,200) in December, up 1.5% on a year ago.

Total sales in 2009 were almost 5% higher than in 2008 - the first annual gain since 2005.

"It's significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit," Lawrence Yun, NAR chief economist said.

"By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010.

"However, the job market remains a concern and could dampen the housing recovery - job creation is key to a continued recovery in the second half of the year."

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