Yesterday the National Association of Realtors (NAR) released their Pending Home Sales Report for April showing a significant 6% increase since March and a whopping 22.4% increase compared to April 2009 as buying activity ramped up in advance of the second (and final) expiration of the government housing tax gimmick that ended in April.
It's important to note that with the government's tax scam now complete and little chance for similar meddling for the foreseeable future, the "organic" and likely far more weak trends will soon start to become more obvious for the first time in well over a year.
Meanwhile, the NARs chief economist Lawrence Yun suggests that the governments settlement deadline should be extended for "homebuyers" who were stimulated by the tax gimmick but may, for one reason or another, have not be able to close before the June 30 deadline.
“A big concern surfacing recently is insufficient time to close the deal at the settlement table. Under normal circumstances, two months would be enough time from contract signing to settlement date, ... However, the recent housing cycle has brought long delays related to the short sales approval process by banks, and from ongoing appraisal issues. There could be a sizable number of homebuyers who responded to tax credit incentives, but may encounter problems meeting the settlement deadline by June 30.”
Yun is, not surprisingly, simply arguing for a soft extension of a poorly directed tax policy that benefited "buyers" (and their brokers) many of whom would have "purchased" even without the financial prodding.
The following chart shows the national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).
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