Riding The Tax Credit Roller Coaster…

Pending home sales surprised to the upside for a second straight month in March. Follow through for April existing home sales (up 6.8% in Mar) should be expected. Pending sales (contract signings) lead existing sales (closings) by a month or two.

The homebuyers’ tax credit has generated big swings in pending sales: +40% from Jan 2009 to Oct 2009; -20% from Oct 2009 to Jan 2010 (after original expiration); +14% from Jan 2010 to Mar 2010 (ahead of current expiration).

Apr 30 Deadline

Buyers need a contract in place by Apr 30 to qualify for the tax credit. Further upside for pending sales is likely next month.

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