Existing home sales rose to their highest rate in three years in November, confirming that the housing industry is set to make a positive contribution to the US economy for the first time since 2005.
Purchases of existing homes rose 5.9% to an annual rate of 5.04 million. Real estate values are bolstering consumer confidence. That indicator rose to its highest level in eight months last week.
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Sales in the December 20 report were the strongest since a first-time buyer credit was due to expire in November 2009.
Sales of higher-priced homes are increasing and becoming a greater share of US economic growth. The growth is giving consumers confidence both in home prices and their local housing markets.
Retail construction may contribute as much as .3% to gross domestic product (GDP). That contribution may double next year and subsequently spill over into related industries
such as furnishings and remodeling.