The housing tax credit is the gift that keeps on giving this April.
According to data released Wednesday, the National Association of Realtors’ (NAR) pending home sales index rose 6% in April compared to the previous month to a reading of 110.9. It represents the highest level of sales activity since last October, when buyers were similarly rushing to purchase homes before last year’s housing tax credit expired in November.
But the level of buying activity in April appears to be motivated by more than just this most recent tax credit, which required a signed contract by April 30 and settlement by June 30. “There were concerns that only a small pool of buyers were left to take advantage of the tax credit extension,” said Lawrence Yun, NAR’s chief economist. “But evidently the tax stimulus, combined with improved consumer confidence and low mortgage interest rates, are contributing to surging sales.”
For comparison, this April’s pending home sales index is 22.4% higher than the same month last year.
Alison Rice is senior editor, online, at BUILDER magazine.