NAR: Pending Home Sales Surge Continuing

Posted by Orb Staff on June 02, 2010 No Comments
Categories : Residential Mortgage

g home sales have risen for three consecutive months, reflecting the broad impact of the home buyer tax credit and favorable housing affordability conditions, according to the National Association of Realtors (NAR). The Pending Home Sales Index, NAR's forward-looking indicator, rose 6% to 110.9 based on contracts signed in April, from an upwardly revised 104.6 in March, and is 22.4% higher than April 2009 when it was 90.6. That follows gains of 7.1% in March and 8.3% in February. Pending home sales are at their highest level since last October when the index reached 112.4 and first-time buyers were rushing to beat the initial deadline for the tax credit. The data reflects contracts and not closings, which usually occur with a lag time of one or two months Lawrence Yun, NAR chief economist, says this second round of surging sales from the tax credit extension looks as strong as the original tax credit. "There were concerns that only a small pool of buyers were left to take advantage of the tax credit extension,’ Yun observes. ‘But evidently the tax stimulus, combined with improved consumer confidence and low mortgage interest rates, are contributing to surging sales. The housing market has to get back on its own feet and now appears to be in a good position to return to sustainable levels even without government stimulus, provided the economy continues to add jobs." NAR expects a net of 1 million additional jobs in the second half of this year and about 2 million in 2011. "The home buyer tax credit brought close to 1 million additional buyers into the market, which is now helping the trade-up market and has significantly improved the inventory situation,’ Yun adds. ‘This stabilized home prices more quickly and has preserved about $900 billion in home equity; in turn, that is keeping additional households from going underwater and risking foreclosure." SOURCE: [link=http://www.realtor.org/press_room/news_releases/2010/06/pending_surge]National Association of Realtors

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