Tax Credit Helps Existing Home Sales Surge in March
Tax Credit Extension Helps Existing Home Sales Increase in March
April 22, 2010 - Existing home sales for the month of March grew 6.8% to a seasonally adjusted rate of $5.35 million. Reaching its highest level since December, last month's gain kicked off what is anticipated to be a strong spring selling season.
A 7.2% increase in the Midwest was the biggest growth seen of all the regions, though every area saw a substantial increase in sales. This broad-based recovery is likely the product of the extended tax credit, which is set to expire at the end of the month.
The extended tax credit, which provides a sum up to $8,000 for first-time buyers and $6,500 to previous home owners, has been in effect since November 2009. Buyers must have their contracts signed by April 30th in order to qualify; they must then close on their home before the end June. Of March's results, first time buyers contributed to 44% of all existing sales.
It is still in question as to whether or not the housing market will "double-dip" or actually push through the second half of the year without any government support. Lawrence Yun, NAR chief economist, believes that there will be enough demand without the government subsidy, but from a consumer standpoint, it's much too early to tell.