Existing-home sales remain high as homebuyer tax credit closing deadline nears

The homebuyer tax credit continued to affect sales of existing homes last month, which dropped 2.2 percent but remained at an elevated annual rate of 5.66 million units, according to the latest data from the National Association of Realtors. In April, closings had surged to a rate of 5.79 million units — an 8 percent gain over the month before. May’s sales rate represents a 19.2 percent increase over the 4.75 million unit annual rate registered in May 2009. “We are witnessing the ongoing effects of the homebuyer tax credit, which we’ll also see in June real estate closings,” said Lawrence Yun, chief economist for NAR. However, he noted, some closings might be delayed by an interruption in the National Flood Insurance Program. “Florida and Louisiana, also impacted by the oil spill, have the highest percentage of homes that require flood insurance,” Yun explained. The deadline for contracts under the homebuyer tax credit was April 30; the deadline to close is June 30, though NAR is lobbying to extend that through Sept. 30. TRD