Pending Home Sales Gain for Third Month

Amid mortgage rates holding near record lows and news that some buyers might be able to use the $8,000 first-time home buyer tax credit toward closing costs on government-insured mortgages, home sale transactions picked up for the third consecutive month in April. An index of pending home sales, calculated by the National Association of Realtors (NAR) from contracts signed in April, indicated a 6.7% month-on-month rise in activity across the US. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” says Lawrence Yun, NAR’s chief economist, in a media statement today. “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,” he adds. Amid mortgage rates holding near record lows and news that some buyers might be able to use the $8,000 first-time home buyer tax credit toward closing costs on government-insured mortgages, home sale transactions picked up for the third consecutive month in April. An index of pending home sales, calculated from contracts signed in April, indicated a 6.7% month-on-month rise in activity. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” says Lawrence Yun, NAR’s chief economist, in a media statement today. “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,” he adds. The pending sale index in the Northeast region spiked 32.6% in April, holding 0.8% above year-ago levels, while the Midwest region saw pending sales jump 9.8% in the month, resting 11.1% above year-ago levels. Write to Diana Golobay.