Figures from the National Association of Realtors (NAR) revealed that homes sales in the US went up by +10.1% in October 2009 aided by the extension to the first time buyer tax credit, whilst total housing inventory fell by -3.7%.

Lawrence Yun, NAR chef economist, said: ‘The supply of homes on the market is now at the lowest level in over two and a half years. We’re getting closer to a general balance between buyers and sellers.

‘Many buyers have been rushing to beat the deadline for the first time buyer tax credit that was scheduled to expire at the end of this month,’

In comparison to October 2008, existing home sales were +23.5% higher and with the tax credit extended until 30 th April 2010, potential buyers have more time to take advantage and purchase a new home. Overall sales activity is at the highest pace since February 2000, according to NAR.

Yun said: ‘There is still a large pent-up demand that can be tapped before the tax credit expires. Our recent consumer survey shows that 13% of successful first time buyers had a previous contract that was cancelled or fell through. So there are likely to be many more buyers who were attempting to purchase but simply ran out of time.’

He has predicted similarly robust sales for November followed by a measurable decline in December and early next year before another surge in spring and early summer

In addition, distressed properties are continuing to distort the average property price down because they generally sell at a discount relative to traditional homes in the same area, they accounted for 30% of the sales in October.