Monday, April 26, 2010

Sales of New Homes Soar With Help of Tax Credit

According to Christine Hauser of the New York Times, the housing industry in this country is showing improvement largely because of the federal homebuyer tax credit. On Friday the Commerce Department announced that sales of new homes rose in March to their highest levels since last summer.

Over all, the sales of new single-family houses in March were up nearly 27 percent at a seasonally adjusted annual rate of 411,000 units, the Commerce Department reported. The increase, which was against a revised rate of 324,000 for February, exceeded expectations.

“In simple terms, housing is a bargain again, and buyers are responding,” Michael D. Larson, a real estate and interest rate analyst at Weiss Research, wrote in a research note. “That is unambiguously good news for the market going forward.”

On Thursday, the National Association of Realtors said that sales of previously owned homes had also exceeded expectations, rising 6.8 percent. The monthly rise in sales of new homes was the biggest since April 1963, when it was 31.2 percent, Mr. Larson said.

Economists said the figures suggested that buyers were taking advantage of an $8,000 government tax credit that was scheduled to expire at the end of the month.

But there were other factors beside the tax credit, like an increase in builder optimism and housing starts, that helped push sales higher. Mr. Larson said he expected to see continual improvement in construction activity.

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