Existing Homes Sales Rise as Tax Credit Ends

Sales of existing homes rose moderately in March to 5.35 million units annualized as consumers rushed into purchase contracts to take advantage of expiring tax credits for first-time and move-up buyers. According to figures released by the National Association of Realtors, sales of one- to four-family homes, including condos and co-ops, rose almost 7% from the previous month, and 16% from the same month a year ago. NAR called the surge in sales "expected" but the news wasn't all good: home prices remained almost flat with the national median at $170,700, and the inventory of existing homes for sale rose 1.5% to 3.58 million units. "Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably," said NAR chief economist Lawrence Yun. When condos and co-ops are excluded, sales rose sequentially by 7.3% to 4.68 million units. Year-over-year the increase was 13.3%. Mortgage lenders fear that once the $8,000 FTHB tax credit expires home sales-and therefore loan applications-will suffer.