WASHINGTON — A rush of homebuyers aiming to meet a deadline to qualify for a federal tax credit pushed the number of signed sales contracts to the highest level since October.
The National Association of Realtors said Wed nesday its seasonally adjusted index of sales agreements for previously occupied homes rose 6 percent in April from a month earlier to a reading of 110.9. March’s reading was revised upward to 104.6.
The rise marked the third consecutive month of increases, all of them aided by federal tax credits of up to $8,000. But the tax credits expired April 30. Many analysts expect sales to drop in the coming months.
“Clearly, the race to meet the tax-credit deadline has left the homebuying pipeline rather empty, and we fear that still high unemployment, heavy indebtedness and tight credit will mean that it stays that way,” wrote Paul Dales, U.S. economist with Capital Economics.
Evidence of a slowing market was apparent Wed nesday when the Mortgage Bankers Association released a weekly report on applications to purchase homes.
Applications fell for the fourth straight week to the lowest level since April 1997. Plus, foreclosures are still at extraordinary levels, which is likely to push down home prices in the second half of the year.
