"Home sales will increase 15 percent to about 5.7 million units in 2010" stated the National Association of Realtors Chief Economist Lawrence Yun late last week during the 2009 NAR Conference and Expo. Yun credits the popular first-time home buyer tax credit for the surge of home sales in the market, with the expectation that the extension to the program will continue to drive an increase in real estate sales.
NAR reported that this year's first-time home buyer tax credit brought 400,000 first-time buyers into the national real estate market who may not have purchased a home otherwise. The incentive was successful in driving home sales throughout the U.S. The influx of buyers tightened the inventory of starter homes and helped reduce the fear shared by many current homeowners and sellers of continued price drops.
According to the NAR, this positive cycle is expected to continue into 2010 with the extension and expansion of the tax credit, which includes a new credit for repeat buyers and an increase in the income limitations. The tightening inventory at all price points will help improve the real estate market performance by bringing supply into better balance with demand.
New home sales, which make up approximately 10 percent of the market, is expected to continue at somewhat suppressed levels - about 550,000 units, mainly due to builders scaling projects back because financing has not been readily available. However, it is predicted that new home sales will see more of an increase in 2010 then they did this year, with signs of stabilization continuing in the market.
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