Tax Credit Rush Bumps April Sales

Posted by Orb Staff on May 27, 2010 No Comments
Categories : Residential Mortgage

ng-home sales rose again in April with buyers motivated by the tax credit, improving consumer confidence and favorable affordability conditions, according to the National Association of Realtors (NAR). Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6% to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8% higher than the 4.7 million-unit pace in April 2009. Monthly sales rose 7% in March. According to Lawrence Yun, NAR's chief economist, the gain was widely anticipated. "The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market," he says. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.10% in April from 4.97% in March; the rate was 4.91% in April 2009. Total housing inventory at the end of April rose 11.5% to 4.04 million existing homes available for sale, which represents an 8.4-month supply at the current sales pace – up from an 8.1-month supply in March, NAR says. Raw unsold inventory is 2.7% above a year ago, but remains 11.6% below the record of 4.58 million in July 2008. "Although inventory levels remain above normal and much of the gain last month was seasonal, the housing-price correction appears essentially over," Yun adds. "In fact, a majority of the markets have seen price gains recently. A return to old-fashioned responsible lending and buying will help the housing market avoid disruptive and painful bubble-bust cycles." The national median existing-home price for all housing types was $173,100 in April – up 4% from April 2009. Distressed homes accounted for 33% of sales last month, compared with 35% in March. A parallel NAR practitioner survey shows first-time buyers purchased 49% of homes in April – up from 44% in March. Investors accounted for 15% of transactions in April – a drop from 19% in March. SOURCE: [link=http://www.realtor.org/press_room/news_releases/2010/05/ehs_april ]National Association of Realtors

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