Released today by the National Association of Realtors a new report has indicated better-than-expected data on the housing market which has sent investors back into stocks today after three-days of losses at the end of last week.
Based on this news major stock indexes soared about 150 points which is more than 1.5 percent in early trading today.
The NAR report showed a large jump in home sales which rose 10.1 percent in October to a seasonally adjusted annual rate of 6.1 million which is their highest level in almost two and a half years. Analysts had only been expecting a 1.4 percent increase in home sales but home sales far exceeded their expectations last month.
The federal tax credit for first-time homebuyers was originally set to run out on November 30th; however Congress renewed the credit earlier this month while further broadening its reach to include people who have lived in their current homes for five consecutive years out of eight. They can now claim a tax credit of up to $6,500 for a home purchase, but in order to qualify, however, buyers must sign a purchase agreement by April 30th and must close escrow by June 30th.
The October home sales figures released by NAR today reflected offers that were made before buyers knew that the federal tax credit was to be extended which indicates that there was a rush to quickly complete sales before the deadline.
As winter arrives sales will most likely drop as homebuyers hibernate for a few months knowing that a tax credit deadline is not right on their heels. The newly extended deadline could mean that there will be some really good activity next spring.