Tax credit helps home resales surpass forecast, jump 9.4% in Sept.
WASHINGTON - Racing to complete their purchases before a tax credit for first-time owners expires, home buyers pushed sales up last month by the largest amount in more than 26 years.
After jumping 9.4 percent in September, home resales are up nearly 24 percent from the bottom in January, the National Association of Realtors said yesterday. But the housing market’s momentum could easily peter out if Congress doesn’t extend the credit of up to $8,000 for first-time buyers beyond its current Nov. 30 deadline.
John Kindschi, a 33-year-old aircraft mechanic who lives north of Seattle, didn’t want to miss out. After a yearlong search, he and his family bought a three-bedroom house for $206,000, completing the purchase last week.
“It was getting down to crunch time,’’ he said. “We had no idea if the credit was going to be extended.’’
Nationwide, sales rose to a seasonally adjusted annual rate of 5.57 million last month, from a downwardly revised pace of 5.1 million in August. It was the strongest month in two years and beat economists’ forecast of 5.35 million, according to Thomson Reuters. Sales, however, are still down 23 percent from their peak four years ago.
In another positive sign, the inventory of unsold homes on the market fell almost 8 percent to 3.6 million. That’s less than an eight-month supply at the current sales pace and the lowest level since March 2007.
Most economists believe that prices, which recently stabilized, will resume their descent. The median sales price last month was $174,900, down almost 9 percent from $191,200 a year earlier and slightly lower than August’s median of $177,300.
The main reasons prices are weak: Unemployment and foreclosures are still rising.
