The Tax Credit Impact
Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.
Yun projects the extended and expanded tax credit will encourage 2.4 million households to take the credit in 2010.
“While new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010,” Yun says. Last year there were 5.16 million existing-home sales.
He added that one of the greatest benefits of rising sales will be firming home prices.
“For several months now we’ve been seeing stabilization in all of the home price measures as inventory is pulled down,” Yun says. “As a result, the housing wealth for many middle class families has begun to stabilize.”
Here's a breakdown by region for the PHSI:
- Northeast: rose 2.3 percent to 76.1 in December and is 14.9 percent higher than December 2008.
- Midwest: increased 5.2 percent to 86.9 and is 8.7 percent above a year ago.
- South: rose 2.2 percent to an index of 98.4, and are 5.5 percent higher than December 2008.
- West: fell 3.8 percent to 119.9 but is 18.6 percent above a year ago.