Existing home sales better but real test lies ahead

Existing Home Sales totaled 5.35mm, 60k more than expected and up from 5.01mm in Feb. Contracts were likely signed in the Dec-Jan time frame as 1st time buy buyers take advantage of the home buying tax credit before it expires as 44% of buyers were first time, up from 42% in Feb. The NAR said “the home buying tax credit has been a resounding success.” Investors accounted for 19% of sales, unchanged with Feb and distressed sales totaled 35% of sales. The greater than expected sales offset the rise in the number of homes for sale thus sending the months supply to 8 from 8.5. Bottom line, without the tax credit in a week, the industry will be put to its next major test and the NAR holds out hope as do the rest of us, “with home values stabilizing, a revival in home buying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears.” Can we transition without such a popular drug?