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US home sales up 6% year on year, latest index shows

This was below the October 2013 non-seasonally adjusted annual sales pace of 5.2 million but the firm pointed out that a slow down in home sales is expected heading into the winter months. Home sales have increased year over year for the past 23 months, an indication that the housing market continues to recover. Improvement in November home sales were led by re-sales which increased by 16%, followed by sales of newly constructed homes which increased by 14%. Real-estate owned (REO) sales and short sales decreased by 24% and 29% respectively, continuing the trend in the shift away from distressed sales towards healthy home sales. Distressed sales accounted for 16.2% of total sales in November 2013, a strong improvement from a year ago when distressed sales were 23.1% of total sales. Distressed sales are made up of REO and short sales, which were 10.4% and 5.8%, respectively, of total sales in November. The peak in the distressed sales share was in January 2009 when distressed sales totalled 32.9% of all sales. REO sales made up 28.3% of sales at their peak, and this shift away from REO sales is a driver of improving home prices, as REOs typically sell at a larger discount to healthy sales than short sales, the firm pointed out. Its reports says that there will always be some amount of distress in the housing market, so one would never expect a 0% distressed sales share, but the pre-crisis share of distressed sales was traditionally about 2%.