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[NAR] Existing Home Sales Surge 9.4%, 45% Are First Time Buyers

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Not surprisingly, existing home sales jumped this month. Here’s NAR’s existing home sales [2] release and the data [1].

including single-family, townhomes, condominiums and co-ops – jumped 9.4 percent to a seasonally adjusted annual rate1 of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.

The NAR wants the tax credit to be renewed so that the housing market can experience a self-sustaining recovery.

In fact, its all about the tax credit [3].

Sales of existing homes surged in September as buyers raced to take advantage of the tax credit for first-time home buyers before it expires next month.

Nationwide, sales of previously owned homes jumped 9.4% in September to a seasonally adjusted annual rate of 5.6 million from a downwardly revised 5.1 million in August, the National Assn. of Realtors reported Friday.

A long time friend of mine in suburban Chicagoland, who is a successful real estate agent told me that three quarters of his business was prompted by the tax credit. If its not renewed, sales will fall sharply.

In other words, the take away from this report seems to be a bit of a false positive. The surge in sales was a release of pent-up demand from a stalled market in the beginning of the year. Everyone’s chiming in [4] about how important the tax credit is to restore housing market activity.