Existing-home sales rise in March
But the larger question is what happens after the big first-time and move-up homebuyer credits expire.
Existing-home sales actually grew in March from February. But the big question is what will happen next.
The National Association of Realtors said existing-home sales rose 6.8% to a seasonally adjusted 5.35 million units in March.
A big part of the gain was the government's homebuyer tax credit. Sales were up 16.1% from March 2009. But homebuilding shares rallied on the news. The Philadelphia Housing Sector Index ($HGX) jumped 3.% to 127. The index is up 13% this month and 24% this year.
Economists were looking for an increase of 5.2% to an annual rate of 5.28 million homes.
The homebuyer tax credits required that buyers get firm offers accepted by the end of the month. The deals must close by the end of June.
For a first-time homebuyer, the tax credit is $8,000. A move-up homebuyer can qualify for a $6,500 credit.
Given the nation's high unemployment rate (9.7% in March), the question is whether homebuying would fall off precipitously as did auto buying after the Cash for Clunkers program last year.
But the drop-off in auto sales was short-lived, and sales have been stronger so far in 2010 than a year ago.
That's one reason why homebuilding shares moved higher today.
Another cause may be reports that some builders are starting to raise prices. Jon Lansner and Jeff Collins noted the increases this week in The Orange County Register in California.
Mind you, the median price of a new home in Orange County in March was off 45.5% from the 2005 peak.
Elizabeth Strott contributed to this report.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market finished a down week on a cautious note with small caps leading the retreat. The Russell 2000 lost 0.5%, widening its weekly decline to 2.6%, while the S&P 500 shed 0.3%. The benchmark index ended the week lower by 2.7%.
This morning, the market was provided a basis to rebound with the July employment report, which was just right for the policy doves (209K versus Briefing.com consensus 220K). It showed payroll growth that was weaker than expected, ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'