Pending Home Sales Up for Three Months in a Row
Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit, according to the latest numbers. Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions.
“Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said.
“Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.””
June Market Forecast
The three straight months of rising pending home sales is welcoming and encouraging.
First-time buyers are responding to the incentives of rock-bottom mortgage rates and the tax credit to pick up low- priced homes. Recent figures suggest about 45 percent of buyers have been first-timers, higher than the typical 35 to 40 percent during more normal years.
A high proportion of the transacted homes are distressed, either in foreclosure or requiring a lender approval short-sale, with deep discounted prices.
By the fourth quarter, existing home sales are projected to be about 15 percent higher compared to the comparable period the year before, if all goes as planned.
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