``But the lower rates also allow home buyers to pay more for a home, which many believe has been a factor in the recent turnaround in home prices. Frank Nothaft, chief economist at Freddie Mac, said the lower rates should help the ongoing housing recovery.

On Wednesday, the National Association of Realtors reported a 7.8% gain in sales of previously owned homes compared to a year earlier, while the Census Bureau reported that housing starts and building permits rose substantially in August. Other readings have reported that home prices are finally turning higher after years of steady decline.''

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