INSTANT VIEW: Existing home sales at best rate since Feb 07

NEW YORK (Reuters) - Sales of previously owned U.S. homes rose in October at a faster-than-expected pace to the highest in more than 2-1/2 years as buyers rushed to take advantage of a popular tax credit, a survey showed on Monday.

KEY POINTS: * The National Association of Realtors said sales surged a record 10.1 percent to an annual rate of 6.10 million units, the highest since February 2007, from a downwardly revised 5.54 million unit pace in September. * Analysts polled by Reuters had expected October sales to jump to a 5.70 million unit pace from the previously reported 5.57 million units in September. Compared to October last year, home sales were up by a record 23.5 percent.

COMMENTS:

STEVE GOLDMAN, MARKET STRATEGIST, WEEDEN & CO, GREENWICH,

CONNECTICUT:

"Nice surprise for markets; it sees a drop in inventories, it sees a market that is still coming off the lows in a robust fashion... the price declines are enough to entice buyers.

"You do have the stimulus plan as far as tax credits back in place. It continues to argue for a slow recovery in the making."

DAVID ADER, HEAD OF GOVERNMENT BOND STRATEGY, CRT CAPITAL GROUP

LLC, STAMFORD, CONNECTICUT:

"The sharp gain to existing home sales is certainly bullish news, but with a cloud we'll put over it. First, it's clear that there's ample existing stock to turn over versus new construction so while a good precursor to stability it's a comment on price declines for existing homes and not the GDP building for new homes. Second, related to this, is that fact that lower prices are still at hand and a keen motivator -- or people are buying smaller homes. We suspect that the first-time home credit helped these figures, by the way, so some stimulus impact."

ADAM YORK, ECONOMIST, WELLS FARGO SECURITIES, CHARLOTTE, NORTH

CAROLINA:

"Huge jump in sales makes this the best performance since early 2007. Vast majority of gains can be attributed to the originally expected expiration of the first-time home buyer tax credit. Look for a steep payback in either November or December data. Come the first of the year we may see some gains again as the extension/expansion of the credit shows up in the data. Underlying trends will be difficult to find in the next few months as the tax credit distorts activity."

WILLIAM LARKIN, PORTFOLIO MANAGER, CABOT MONEY MANAGEMENT,

BOSTON:

"The number is a positive because it means that the tax benefits going into the housing market are working and that's a relief. Everything is about housing and jobs right now."

MARKET REACTION: STOCKS: U.S. stock indexes added to gains. BONDS: U.S. Treasury debt prices were little changed. DOLLAR: U.S. dollar fell against the euro, rose against the yen.