Pending home sales surge in West
Sixth consecutive monthly gain for NAR index
By Inman News, Tuesday, September 1, 2009.Pending home sales rose 3.2 percent from June to July, with a surge in sales in the western U.S. outweighing declines in the Northeast and Midwest, the National Association of Realtors said today.
It was the sixth consecutive monthly increase in pending home sales, a trend that NAR Chief Economist Lawrence Yun expects to continue before falling off in the first quarter of 2010 if a tax credit for first-time homebuyers is allowed to expire Nov. 30.
NAR's pending home sales index increased 3.2 percent from June to July and was up 12 percent from a year ago, NAR said. The index, based on contracts signed but not closed, is at the highest level since June 2007.
Pending home sales were up 12.1 percent from June to July in the West and 3.1 percent in the South, but fell 3 percent in the Northeast and 2 percent in the Midwest regions. All four regions saw a year-over-year increase in pending home sales, led by the West (20 percent) and followed by the South (12 percent), Midwest (8.1 percent) and Northeast (4.7 percent).
Yun said housing affordability has been at record highs this year, and that the added stimulus of an $8,000 first-time homebuyer tax credit has generated about 350,000 additional sales.
Although 1.8 million to 2 million homebuyers are expected to take advantage of the credit, NAR is urging Congress to extend it into 2010 and make it available to all buyers.
"Unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year," Yun said in a press release. With housing market fundamentals and the economy picking up, NAR expects home sales to pick up again in the second quarter of 2010, Yun said.
Bills pending in both houses would extend the credit for another year. Senate Banking Committee Chairman Sen. Chris Dodd, D-Conn., is co-sponsoring a bill by Sen. Johnny Isakson, R-Ga., that would increase the maximum amount of the credit to $15,000.
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Submitted by Matt Carter on September 1, 2009 - 12:55pm.
Calculated Risk estimates that if 1.9 million first-time buyers claim the credit, the total cost of the program will be $15.2 billion, divided by 350,000 additional sales = $43,400 thousand cost to taxpayers to generate each additional sale.
"The actual number could be much higher if there were fewer additional first-time buyers than the NAR's estimate - or if the overall cost is higher (more buyers claiming tax credit)."
http://www.calculatedriskblog.com/2009/09/houses-and-autos-cost-of-tax-c...
Submitted by Larry Whited Sr. on September 1, 2009 - 1:52pm.
This is one of the few government programs that have worked well. We should all contact our congress reps and senators and urge them to extend the tax credit to the end of next year.
The tax credit extension is vital to clear the distressed properties from the market. We will not have a sustained recovery until most of the “toxic” housing inventory is gone.
Housing has always lead us into and out of a recession. We need to keep this recovery going or housing and the economy will tank again in spring.
The $16 billion cost for the current program has been a much better investment than the $700 billion gift our government gave to wall street last year.
Can anyone tell us how much benefit they got from last years $700 billion stimulus package last year?
Larry A. Whited, Sr., CRB, CRS, GRI
President & Founder
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