Wednesday, September 02, 2009

Pending Home Sales Hit 6th Straight Increase

Yesterday a new report was published with more good news for the real estate market. According to the study, more Americans bought homes in July than in June, which represents the sixth straight month that there was an increase in home sales. Many experts claim that the increase is a direct result of the first-time homebuyers credit that expires at the end of the year. Checkout the following article from CNN on the recent findings.

The pending home sales index from the National Association of Realtors rose 3.2% in July after rising by 3.6% in June. That's 12% higher than July 2008, and it marks the sixth straight increase since record-keeping began in 2001.

The reading far exceeded forecasts of economists surveyed by, who predicted a 1.5% increase. Signed real estate contracts often take many weeks or months to complete, so they are considered a forward-looking indicator.

Momentum in the housing market has clearly turned for the better, said NAR chief economist Lawrence Yun, in a written statement.

"The recovery is broad-based across many parts of the country," Yun said. "Housing affordability has been at record highs this year with the added stimulus of a first-time homebuyer tax credit."

The first-time homebuyers tax credit, passed earlier this year as part of the economic stimulus package, is worth 10% of the home purchase price up to $8,000. People who have not owned a home in the previous three years are eligible for the credit.

However, the tax credit expires on Nov. 30 and it usually takes about 90 days to close on a house after a contract is signed. As of Sept. 1, there were only 90 days left before the credit ends.

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