Surprisingly, home sales jumped in March, more than initially projected after three months of falling numbers. At the end of the day, newly created government homebuyer incentives lured many first-time buyers. According to the National Association of Realtors, pre-occupied home sales went up 6.8% to its highest level since December, 2009.
Economists and analysts speculate sales will continue to rise as a result of tax credits given to first-time homebuyers and low mortgage rates. Presently, according to Freddie Mac, the average interest rate was 5.07 for a 30-year fixed-rate mortgage. And while the Feds are helping to stabilize the housing market, it will be interesting to see if it can maintain this momentum and for how long.
Paul Dales, a US economist with Capital Economics, said of sales surge, “…this is a temporary surge that won’t be sustained. It won’t be very pretty.” Recently, the government offered an $8,000 credit to first-time buyers and another $6,500 for current homeowners who are interested in buying and moving into another property/home.
But these credits are time sensitive—buyers need to sign contracts by today, April 30th in order to qualify. Therefore, many new homebuyers were jumping into deals and the numbers went up.
During last year, nationally, home sales numbers really dropped. The government has certainly given the housing market attention. The question remains whether what’s been offered is enough? Can the market stand on its own without government homebuyer incentives? While a majority of economists and analysts are skeptical of the rise in home sales being a consistent trend, there’s no question what a little help from government can do to revitalize a market—temporary as it may seem.