Is another surge in homebuying anticipated as the expanded and extended tax credit deadline approaches?
Yes. Remember that home sales had been falling for nearly 4 straight years, since the frenzy of activity in 2005. Then existing home sales squeaked out a positive gain in June of last year on a year-over-year basis as the tax credit stimulus finally filtered through the system. Sales then zoomed up 23 percent in October and by a whopping 43 percent in November. Sales still remain higher in more recent months compared to a year ago, but not with the same gusto. Based on last year’s experience with when consumers respond in big numbers, we will have to wait till May and June closings for the second surge to occur. (Consumers have to sign the contract to buy by the end of April, but must close by the end of June to get the tax credit for most homebuyers, depending on qualifying conditions.) I do expect the second surge to occur, but we’ll have to wait. 3. The Federal Reserve is ending their mortgage purchase program on March 31st, which has helped keep mortgage rates at essentially rock-b
