The National Association of Realtors released their July pending home sales report this morning showing a seasonally-adjusted monthly increase of 5.2%. Most economists expected the number to come in lower because of the expiration of the $8,000 homebuyers’ tax credit. A closer look at the numbers showed pending sales in the west had the most strength, increasing 11.6%. The south continues to be sluggish with a modest increase of 1.2%.
Real estate experts suggest that the expiration of the tax credit did impact homes sales in the south where home prices are much lower and the credit made a substantial contribution to affording a down payment. In the California however, the tax credit probably contributed little to increased home sales as prices are much higher and the credit made less of a contribution to down payments. The report adds to recent data that in California housing continues to show signs of price stabilization. Foreclosures and excessive inventory is still a problem and will continue to keep prices at affordable levels.
The recent housing data could take the pressure off Washington to stop implementing policies to assist the housing industry, like extending the homebuyers tax credit, and start to focus on what will ultimately be the best remedy to the housing crisis. And that is job growth.
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