September marked the eighth straight month for signed contracts to buy previously occupied homes nationally as buyers continued to quickly take advantage of the $8000 federal tax credit for first-time home buyers that expires at the end of this month.
This past Monday the National Association of Realtors reported that its seasonally adjusted index of sales agreements rose over 6 percent from August to 110.1 which is the highest reading since December 2006 and it is more than 21 percent above from just a year ago. Economists had expected the index level would only be at 103.8.
This index is used as a barometer of future sales and there is typically a one to two month lag between a signed contract and the close of escrow.
This past year has seen the housing market make a rebound from the worst decline in home sales in decades and the aid of aggressive federal intervention to lower mortgage interest rates has also helped bring in more buyers into the housing market.
Furthermore, closed escrows of home re-sales rose in September to their highest level in more than two years.
Last week Congress voted to extend the new home buyers tax credit to home buyers who sign sales agreements by April 30 and they have until June 30 to close escrow. Congress also added a $6,500 tax credit to give returning home buyers the opportunity to buy a new home as long as they have been living in their current home for at least five years.
Economists feel that an extended and an expanded tax credit will help absorb foreclosures that are still being added to the housing market inventory.
In September the west showed a 10 percent increase in pending sales and there was an 8 percent increase in the Midwest.