UPDATE 2-Persimmon says home buyers are back

* Says met sales targets for 2009

* Average selling price of homes up 6 pct to 173,000 stg

* Sees debt level at year-end lower than previous guidance

* Shares up 3.5 percent (Adds CEO, analyst comments, share price)

By Lorraine Turner

LONDON, Nov 16 (Reuters) - Home buyers are returning to the market said UK housebuilder Persimmon (PSN.L) on Monday, as it reported improved trading in the third quarter as well as lower debt.

"The market is encouraging. Buyers are back. Prices have stabilised and there is growing availability of mortgages," CEO Mike Farley told Reuters.

The UK's largest housebuilder by market value said it met its sales targets for the year and booked a further 500 million pounds ($837 million) of sales for 2010.

Persimmon added its debt position at the year-end will be "significantly lower" than its previous guidance of 400 million pounds, enabling it to purchase new land and open outlets.