Purchases of new homes in the U.S. increased 27 percent from February to March to an annual pace of 411,000. That’s up 13 percent on a year-over-year basis (365,000 in March 2009) with Federal tax credits expiring at the end of this month.
For context, the pace of new home sales in the U.S. peaked at 1,389,000 in July 2005.
A Stormy February For U.S. New Home Sales (But Sunny In The West) [SocketSite]
Sales of New Homes in U.S. Climb by Most Since 1963 [Bloomberg]
U.S. New Home Sales Down 31% YOY (West Shows Seasonality) [SocketSite]

23 thoughts on “U.S. New Home Sales Up 13% YOY As Credits Set To Expire”
  1. Come on SocketSite, to attempt to make the link between the expiring tax credits and y/y sales up over 13% is very misleading, even if the Bloomberg factory touts it.
    In SF, the expiring tax credits have nothing to little to do with increased sales.

  2. SFRE, the report is national, and expiring tax credits have alot to do with it. Plus, last year sales were in the toilet…looks like a huge jump, but compared to the peak month quoted it’s clearly more of a dead cat bounce.

  3. SFRE, if you’re waiting for a careful study using regression analysis on all-encompassing data from Bloomberg in order to link the expiring tax credits with increased sales, you’re going to be waiting a long, long time. That said, I wouldn’t wait to see a May downturn associated with the credit expriring; from the article:

    Sales of previously owned homes, which account for about 90 percent of the housing market, are tabulated at contract closings, meaning demand may remain elevated through June. Purchases of new houses reflect contract signings, indicating the credit’s maximum influence will be seen through April.

    I can’t remember where I read it, but I seem to recall that the tax credit doesn’t drop off completely at the end of April, the amount of credit available just starts going down from the $8,000 maximum.

  4. Please Brahma, don’t be a buzzkill. Bullish sentiment from the REIC is a great contrary indicator. I’m just waiting for Time to do another cover of a guy hugging a house before going short. As Wellington advised his troops “wait for it…”

  5. @curmudgeon: I know that is a national report, but the implication is that it relates to the SF market, which I don’t agree with.

  6. Good chart. But why 7 years? A 10 year one showing another boom and bust cycle within it might have been better.

  7. ^^^ Um . . . home-buyer demand will remain falsely pent up — that is, if you really believe the increased sales are a direct result of tax credits. When the federal tax credit expires, the California $10K tax credit kicks in in May until the end of this year or when the money allotted runs out, whichever happens first.

  8. “falsely pent up” — I love it. Keep ’em coming.I only wish that making money off the consequences of venal and short-sighted public policies didn’t mean that the next generation will have to suffer from them.

  9. What? There was a boom and busy cycle in the last 10 years? Well, that must not be SF. SF is immune to everything.

  10. What? There was a boom and busy cycle in the last 10 years? Well, that must not be SF. SF is immune to everything
    Interesting bot-ism.
    What do you think about this one that came to my mailbox today?
    “This national buyer is buying up short sales all across the country. They’ve been on fox news, cnn and a lot of other media outlets. They are interested in any shortsale or preforeclosure listings you may have. They are buying right now, and can close in as little as 7 days
    WATCH PRESENTATION
    Their top legal expert recently did an exclusive 1-on-1 interview. They will be taking the video down soon, so dont wait. Click on the link now to see if your listing or property qualifies.”

  11. When the federal tax credit expires, the California $10K tax credit kicks in in May until the end of this year or when the money allotted runs out, whichever happens first.
    And some first-time buyers will be able to double dip for a total of $18K, as long as they are in contract by the end of April and close by the end June.
    I’m seriously thinking about taking advantage of this by placing an offer on a property this week. I was originally planning to wait until summer, but I found a place I like at the right price point. While I acknowledge that $18K is practically negligible for many SF properties, it’s a significant amount for a 1BR condo.

  12. How can you say that with no knowledge of the particulars?
    You can’t.
    Stop being such a pan-hater, Tipster. You’re playing yourself.

  13. “Yun said housing will start to recover next year, if only because people will keep getting married, having babies, changing jobs and retiring, forcing them to buy or sell homes. “The pent-up demand is there,” he said.”
    That’s from the discredited & laughable Lawrence Yun. Guess if that’s from (1) the Bloomberg article above, or (2) Bloomberg article of 11/2007.

  14. And hopefully you took economics and realize that the seller will get most of that money, not you.
    Yes, I’ve considered that. But right now, first-time home buyers like myself have a $18K advantage over those who don’t qualify for the tax credits. Once the tax credits expire, the playing field is leveled and first-time home buyers such as myself will have more competition from the likes of: buyers who are not first-time buyers, buyers who are looking for investment properties, buyers who make too much to qualify for the tax credits,…
    Regardless, if prices do fall after the tax credits expire as many predict, it’ll take time for prices on comparable properties to drop by that much. Much longer than I’d like to wait, as I really do need to move soon.
    We’ve been looking at rentals for the past several months, and haven’t found anything suitable for us. Nothing nearly as suitable as the condo we’re considering. We could rent a less-than-ideal apartment for the time being, but we don’t want to move right now just to move again in a year or two. We’re willing to take our chances and possibly pay a premium to avoid the hassles.

  15. anon wrote:

    That’s from the discredited & laughable Lawrence Yun. Guess if that’s from (1) the Bloomberg article above, or (2) Bloomberg article of 11/2007.

    Lawrence Yun’s predecessor was the notorious David Lereah. This is from an article by Washington Post Staff Writer Nancy Trejos, published on April 25, 2007:

    The association forecasts that the median home price will drop about 1.1 percent for all of 2007, which would be the first year-long decline on record. Lereah said that he originally expected the housing market to recover by this quarter but that he now believes it won’t happen until summer. A full recovery, he said, will take place in 2008. “I expect a couple of more sluggish months coming,” he said.

    Hmm. Well, what happened in 2008? Was there a “full recovery”? From the same paper, published on December 24, 2008:

    Median new-home sales prices fell to $220,400 in November, down 11.5 percent from $249,100 a year earlier. The slump in the resale market was even more pronounced: Existing-home prices fell 13.2 percent, to $181,300 from $208,800, the largest drop since the Realtors group began collecting data in 1968

    Nothing specific to the S.F. or even the larger S.F. MSA here, but still.

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