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Report: September home sales drop, prices rise

Home sales dropped in September, according to a new report.

Home sales dropped in September, according to a new report.

A new report says that moving activity continued to be depressed during the month of September following the expiration of the first-time homebuyer tax credit earlier this year.

According to the National Housing Report from RE/MAX, home sales in September were 6.4 percent below numbers from the previous month, and showed a drop of more than 20 percent compared to September 2009. However, analysts were not discouraged by the decline.

"We anticipated the drop in home sales this summer due to the tax credit, and we usually see sales in September fall below August levels, but we're encouraged by reports of signed contracts in the field," said Margaret Kelly, CEO of RE/MAX.

While sales declined, the median sales price increased 0.9 percent, according to the report, meaning that sellers were gaining at least some traction in their relocation attempts. However, the number of days it took to sell increased slightly, jumping to 88 days in September from 84 days previously.

Economists had hoped that low interest rates would help spur an increase in the number of families moving to new locations. According to Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage last week was just 4.21 percent - the lowest since 1951.