The National Association of Realtors reported today that sales of previously owned homes rose 7.6 percent in April to a seasonally adjusted annual rate of 5.77 million which gave the housing market its biggest boost in five months.
In April homebuyers rushed to take advantage of the two expiring government incentives and record-low mortgage rates but now that both federal homebuyer tax credits have expired, any improvement in California's housing market will depend on low mortgage rates and its own homebuyers tax credit.
The impact of the two federal tax credit's are expected to linger.
The increase in home sales this spring has sparked a rise in home prices with the median home price up 4 percent from a year for new homes to $173,100.
As concerns over the European debt crisis sent investors running to the safety of the U.S. credit markets, mortgage rates fell last week to their lowest level for the year which was close to 50-year lows.
The inventory of unsold homes increased in April to about 4 million units which represents close to 9 months worth of supply of homes which is down from inventory levels reached at the depths of the housing crash. Normal inventory levels are around six months worth of supply.