An index gauging the number of pending home sales increased 3.2% in July, the sixth straight month of increases for the National Association of Realtors’ (NAR) Pending Home Sales Index. The index rose 12% over July 2008. The July index marks the highest level since June 2007. The six months of consecutive increases is the longest streak since the index was created in 2001. Increases of 12.1% and 3.1% in the West and South, respectively, made up for losses of 3% and 2% in the Northeast and Midwest. Much of the activity is due to lower home prices and first-time buyers taking advantage of the $8,000 federal tax credit, NAR said. The association estimates 350,000 of the projected 2m first-time homebuyers who have or will take advantage of the credit would not have got into the market without the incentive. As the November 30 deadline for the tax credit looms, NAR is lobbying Congress to extend the program. NAR chief economist Lawrence Yun said he expects existing-home sales to rise through the fourth quarter, but “unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year.” But, Yun added, he expects home sales to increase in Q210. “The buyer psychology may be shifting from, ‘Why buy now when I can purchase later,’ to ‘I don’t want to miss out on a recovery,’” he said. Write to Austin Kilgore.
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