A proposed six-month extension of the successful federal program for first-time homebuyers would fuel continued market recovery even as home sales declined this past month. New buyers are playing a key role, accounting for nearly a third of recent residential sales and helping deplete inventory, which will be crucial as new waves of foreclosures hit the market. See the following post from Property Wire for more on this.
Residential property sales in the US fell last month but they are still doing better than they were a year ago, according to the latest published figures.
Existing home sales fell 2.7% in August compared with July but they were still up 3.4% compared with the same month in 2008, the date from the National Association of Realtors shows.
The NAR figures also shows that in the last four months residential property sales have increased by 15.2% and the amount of property actually on sale has fallen, down 10.8% in August.
The total housing inventory is down to 3.62 million homes for sale, representing an eight and a half month supply based on the current sales pace, down from a 9.3-month supply in July.
Also the national median existing home price dropped 12.5% from last year to $177,700, according NAR figures.
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It says that the continued growth in real estate sales is due in a large part to the first-time homebuyer tax credit, which is due to come to an end at the end of November.
But there is considerable pressure from the industry for the US government to extend this incentive and a bill to extend the scheme by six months has been introduced in the Senate.
Lawrence Yun, NAR chief economist, is backing an extension and he said these figures show it is working.
The credit, which gives qualifying buyers up to $8,000 in tax refunds, is estimated by a recent Campbell Communications survey to have resulted in 357,000 additional property sales so far in 2009.
‘Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus.
The first-time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions,’ Yun said.
First-time homebuyers purchased 30% of homes in August, and distressed purchases made up 31% of transactions, the same totals as July, according to the NAR.
‘The recent trend shows broad improvement in most of the country, but with an expected rise in foreclosures over the next 12 months we need to maintain a healthy level of ready buyers to absorb the inventory.
An extension of the tax credit is critical to preserve incentives for financially qualified buyers to enter the market,’ added Yun.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.