Home sales rose 5.3 percent in March, beating analysts expectations significantly. Earlier, the Commerce Department had reported that new home sales, which make up a small percentage of the entire housing market, had surged 27 percent from February to March, and were up 23 percent from a year ago. And in March, the median existing single family home cost $170,700, up from February's $163,900. But prices are still well below last summer's levels, when the median home cost $181,900.
Of course, that $8,000 homebuyers tax credit, which expired last week, propelled those March sales, particularly after a bad-weather February. (Buyers who signed contracts by April 30 have until June 30 to close on their deal to qualify for the credit.) "In the months immediately following the expiration of the tax credit, we expect measurably lower sales," said Lawrence Yun, chief economist of the National Association of Realtors. His group now expects existing home sales to be up 4.3 percent in 2010 and 5.1 percent in 2011. A month ago, they had expected 2010 sales to be up 6.5 percent and 2011 sales to be up 3.7 percent.
This year, the early signs of recovery can be expected to bring many more homes to market, keeping prices from leaping. At the same time, the continued weakness in the economy is keeping mortgage interest rates near all-time lows.
The bottom line for buyers? More choices, cheap mortgages, and the rest of the year to take your time shopping for the just-right house. And here's a bonus: That federal homebuyer's credit might have expired, but some places -- Washington, D.C. and the whole state of California, for starters -- offer their own credits for homebuyers. Shop carefully and strategically, and you can still get paid to buy that home.
Photo courtesy of thetruthaboutmortgage.com
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