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Home sales reach highest rate since early 2007 in November

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Americans bought homes in November at the fastest pace in nearly a decade, despite a shortage of houses for sale, according to a report. (AP Photo/Alan Diaz)

Existing home sales edged up to a 5.61 million annual pace in November, the National Association of Realtors reported Wednesday, beating forecasters' expectations and providing a bright sign for the economy.

Sales of homes were up three months in a row to the highest level since February 2007, according to the trade group.

Despite some fears about the weakness of the housing market over the late summer and fall, the housing market appears to be heating up to end the year, said Lawrence Yun, chief economist for the group. "The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates [rise] from their historically low level have combined to drive sales higher in recent months," he said.

The home sales report is just one of several positive indicators about the economy as President-elect Trump prepares to take over from President Obama. The unemployment rate plunged to 4.6 percent in November, a rate even lower than what economists at the Federal Reserve thought would signify a fully healthy economy.

The increase in sales came despite a surge in mortgage rates in November, reflecting a broader surge in markets. Rates on 30-year fixed-rate mortgages rose over 4 percent in the month, according to Freddie Mac.

The inventory of homes for sale dropped in November, helping push up prices nearly 7 percent on the year. With demand high and supply low, further price increases are in store for 2017, Yun said.

Existing home sales remain well off the peaks reached before the crisis, back when the housing market was in a bubble. Sales of new homes, furthermore, remain at less than half the pre-crisis levels, although they rose throughout 2016. Officials at the Fed were worried in recent months about the weak housing market, but Wednesday's results could reassure them about the health of the economy.