February home sales increase sharply

Pending homes sales rose 8.2 percent despite analysts’ predictions that sales would remain flat, according to an index released Monday by the National Association of Realtors. 

In a release, the group said the data potentially signaled “a second surge of home sales in response to the homebuyer tax credit.”

This is the second surge recorded in recent months within the struggling real
estate market, prompting hopes that the housing crisis could be nearing an end.

The National Association of Realtors index is an indicator of contracts signed in February, not closings. Closings usually occur with a lag time of one or two months, according to the group. 

Notably, sales climbed 9 percent in the Northeast and South, despite heavy snows throughout February.

First-time homebuyers have until April 30 to take advantage of a housing credit up to $8,000. The National Association of Realtors told The Hill last week that it wouldn’t pursue an extension of the tax credit.

Sales picked up last fall when the tax credit was extended. 

There also is a $6,500 tax credit for veteran homebuyers. Sales must close by June 30 to be eligible for the credit. 

Lawrence Yun, NAR’s chief economist, said the increase in activity may “signal the early stages of a second surge of home sales this spring. The healthy gain hints home prices are continuing to flatten.” 

“We need a second surge to meaningfully draw down inventory and definitely stabilize home values,” Yun said Monday in a release.