Rush to Beat Tax Credit Deadline Pushes up Pending Sales

Contracts on existing homes rose 6.1 percent in September as first-time homebuyers rushed to take advantage of the $8000 Federal tax credit before it expires November 30.

The Pending Home Sales Index is 21.2 percent higher than September 2008. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006.

"What we're witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month," he said. "Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery," said Lawrence Yun, NAR chief economist.

"We're clearly not out of the woods because an excess of homes remains on the market despite recent improvements," Yun said. "Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory."