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June 2, 2010    

US Pending Home Sales Index rises for third straight month

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by Kay Murchie
US Pending Home Sales Index rises for third straight month

The National Association of Realtors (NAR) today said its Pending Home Sales Index rose for the third consecutive month in April boosted by the expiration of a Government tax credit.

The NAR said the index rose 6% in April - far exceeding the 4.3% rise which many analysts had predicted.

However, the index is 22.4% higher than in April last year.

The rise was attributed to the expiration of a Government incentive - which ended on 30 April.

To qualify for the tax credit, borrowers had to have a signed offer by 30 April and the deal must be finalised by 30 June.

US home sales this year have been boosted by low mortgage rates and two tax credits: up to $8,000 for new buyers and $6,500 for current owners who buy and move into another home.

Lawrence Yun, NAR chief economist, said the second round of surging sales looked as strong as the original tax credit.

“There were concerns that only a small pool of buyers were left to take advantage of the tax credit extension,” he said.

“But evidently the tax stimulus, combined with improved consumer confidence and low mortgage interest rates, are contributing to surging sales.”

April’s gain followed rises of 7.1% in March and 8.3% in February. The index was at its highest level since last October, when first-time buyers rushed to beat the initial deadline for the Government’s tax credit, according to the industry body.

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