Sales of new homes forecast to rise 2 percent

WASHINGTON - Sales of are expected to post a modest increase in October, reinforcing data this week that showed the real estate market is regaining its footing after a dramatic collapse. The report on October new home sales, to be released Wednesday at 10 a.m. EST, is forecast to show a 2 percent increase to a seasonally adjusted annual rate of 410,000, from 402,000 in September, according to economists polled by . Since the report reflects signed contracts to buy homes, rather than completed sales, new home buyers in October were acting before lawmakers this month decided to extend the tax credit for first-time buyers and expand it for existing . Now that the credit will cover contracts signed by April 30, "we'll probably see new home sales trend higher over the next two to three months, perhaps fairly strongly," said Paul Dales, U.S. economist at Capital Economics Ltd. The building industry lobbied hard for the tax credit extension, and builders have been feeling better about their business prospects these days.

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