Pending Home Sales Stabilize
Pending home sales have leveled from a market swing driven by response to the home buyer tax credit, according to the National Association of Realtors.
Based on contracts signed in December 2009, the Pending Home Sales Index increased 1.0% to 96.6 from 95.6 in November, and remains 10.9% above December 2008 when it was 87.1. In November, the monthly index had fallen by 16.4% from surging activity in preceding months.
“There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” Lawrence Yun, NAR chief economist said. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.”
Home buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.
Yun projects 2.4 million households will take advantage of the tax credit in 2010. “While new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010,” Yun said. Last year there were 5.16 million existing-home sales.
National Association of Realtors
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
