Americans continued to re-enter the housing market in April, pushing the National Association of Realtors’ (NAR) pending home sales index up 6.7% on a monthly to a reading of 90.3. On an annual basis, the index also showed positive growth, with a year-over-year increase of 3.2%.
A driving force behind such numbers? First-time home buyers, according to the NAR. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” said Lawrence Yun, NAR’s chief economist. “Since first-time buyers must finalize their purchase by Nov. 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”
So do new-home builders. “We are thinking people are going to rush out and do something with the tax credit in the fall,” Bill Luther, CEO of Gemcraft Homes, told BUILDER yesterday. To capture these buyers, Gemcraft plans to build additional specs because the firm Nov. 30, 2009, deadline for settlements eligible for the tax credit means buyers who start home-shopping in September won’t have enough time to build from scratch and get the tax credit.
Regionally, the Northeast showed the greatest gain in the pending home sales index, leaping 32.6% to a reading of 78.9 in April. Other regions demonstrated stronger performance overall, though, with the Midwest at 90.4 (up 9.8% compared to the previous month), South at 93 (down 0.2%), and the West at 94.8 (up 1.8%)
Alison Rice is senior editor, online, at BUILDER magazine.