WASHINGTON, DC — New home sales rose 27 percent last month, exceeding expectations, thanks to government incentives and better weather, said a report appearing on msnbc.com, April 23.
The U.S. Commerce Dept. said new home sales rose to a seasonally adjusted annual sales pace of 411,000. It was the strongest month since last July, and the biggest monthly increase in 47 years. The expectation of economists surveyed by Thomson Reuters was for only 330,000 new home sales, MSNBC reported. The increase was seen nationwide, with growth at 44 percent in the South, 36 percent in the Northeast, 6 percent in the West and 3 percent in the Midwest.
The March increase is attributed in part to the wave of consumers who are trying to qualify for federal tax credits that will expire at the end of April. The government is offering an $8,000 credit for first-time buyers and $6,500 for current homeowners who buy and move into another property. To qualify, buyers must have a signed contract by the end of April and complete the transaction by the end of June.
Nearly 1.8 million households have used the credit at a cost of $12.6 billion, according to the Internal Revenue Service.
Despite the March increase, new home sales are down 70 percent from their peak in July 2005, the MSNBC report added, and some analysts expect significant drops after the tax credit runs out.
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