US home sales boost from April is not likely to last by Zuzana Zelenakova

In April, US real estate market experienced boost in sales of previously owned houses as homebuyers were in a hurry to close the deals before the deadline for first-time homebuyer tax credit expired. First time homebuyers got $8,000 credit while existing homeowners $6,500 credit. As the National Association of Realtors informed, sales rose 7.6 percent, which was the highest sales pace in a five months period. "The upswing in April sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but there are other factors supporting the market," said Lawrence Yun, chief economist at NAR! . "The critical issue going forward is whether the housing market will be able to stand on its own legs without government support," said yet another economy expert Torsten Slok from Deutsche Bank in New York. The increase in sales has been reflected also in home prices. Average cost of a new home rose 4 percent as compared to the previous year to $173,100. The whole of the United States noted jump in sales except for the West. In the Northeast the big boost provided by the federal government has had the most visible results with the 21.1 percent increase in sales. Sales rose 9.9 percent in the Midwest, while in the South it was 8.6 percent. The opposite tendency was seen in the West where sales dropped 6.2 percent as compared to March. The question that all ask now is what happens next when the support from the government is gone. "What really matters right now is consumer confidence and job growth and home prices not going down much from here," said Josh Levin, analyst fr! om Citigroup Inc. "That really matters a lot more than rates."!
related story (sgx17370): http://news.yahoo.com/s/ap/us_home_sales;_ylt=A0wNdPIg7_pLKR...

by Zuzana Zelenakova for Cantell TV (http://cantell.tv)

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