Strong sales for US housing market

The National Association of Realtors reported that sales of existing homes rose by 2.1 percent last month to a seasonally adjusted annual rate of 4.79 million units.

There is good news for the housing market as prices are rising, sales are climbing and new home construction is starting to take off again.

Sales of previously owned homes climbed steadily in October, rising to a 4.79 million annual rate, according to the National Association of Realtors.

The sales rate beat most economists expectations and is 11 percent higher than a year ago, reports Bloomberg.

Last month's gains in the real estate market are being sustained by low borrowing costs and improvements in the job market.

“Housing’s cheap, borrowing is cheap and, if you can get credit, it’s a great time to buy,” said Ward McCarthy, chief financial economist at Jefferies & Co. Inc. told Bloomberg. “We’re fighting our way through distressed-property sales.”

The figures would likely be higher if Superstorm Sandy hadn't hit the Northeast. Sales fell 1.7 percent in the region, the only one to show a decline.

The number of available homes for sale has dropped to its lowest level in a decade, to only 2.14 million. At the current sales pace, there are enough homes available to last for 5.4 months of sales, the lowest since February 2006, reports the Wall Street Journal.

A short supply may cause a increase in home prices, which have risen but still remain lower than they were six years ago.

"We may have a persistent inventory shortage situation next year," Lawrence Yun, the Realtors' chief economist told the Wall Street Journal. This will likely put upward pressure on home prices, he said.

Fewer existing homes may also mean a boon for new home construction. Confidence among US homebuilders rose to its highest level in six and a half years, reports AP.

Despite the strong sales results, first time home buyers are still struggling to meet strict mortgage requirements and come up with the large deposits usually required by banks. Those buyers, who usually make up 40 percent of the market, are still down at just 31 percent, reports CNBC.