The National Association of Realtors announced today that homes sales rose 10.1 percent during October compared to the previous month and 24 percent year over year for the same period. This all adds up to the highest sales level in two and a half years.
The spark behind the sharp uptick was clearly the tax credit of up to $8,000 for first time owners. It was originally set to run out on November 30th. Buyers rushed to get done in time for the credit causing the surge. The tax credit has been extended and now buyers have until April 30th to be under contract on their new homes. In addition to the extension, congress passed a new tax credit that gives up to $6,500 to existing home owners on a purchase as long as they have been in their existing home for at least 5 years.
With the tax credits now good through the end of April, home buying should settle down through the holidays, but expect a strong ramp up throughout the spring.