Industry NewsMarkets & Economy

Tax credit’s second coming: no miracles

Perspective: Real estate's April report card

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

By WAYNE YAMANO Sales boomed last fall as the homebuyer tax credit's original expiration approached in November. With a new tax-credit deadline approaching, sales have improved this spring, but not nearly as much. The pending home sales index through February, which is shown here, shows the slight improvement over January, but is nowhere near as robust as last fall. Our proprietary monthly survey and our weekly calls to our homebuilding clients have confirmed that March and April were not good months. Not only do sales remain low, but also the traffic of interested shoppers is not improving. The Federal Reserve is done buying mortgages from the GSEs (government-sponsored enterprises -- i.e., Fannie Mae and Freddie Mac); elected officials have declared that there will be no more tax-credit extension; and recent loan modification clarifications have cleared the way for the mortgage servicers to increase their foreclosure acti...