Home Sales Jump

By Renae Merle
Washington Post Staff Writer
Friday, October 23, 2009; 12:43 PM

Existing home sales jumped 9.4 percent in September to their highest level in two years, fueled by first-time home buyers pouncing on cheap prices and an $8,000 tax credit, according to industry data released Friday morning.

Sales of existing homes, including condos and single-family residences, reached an annual rate of 5.57 million units in September, their highest level since July 2007, according to the National Association of Realtors. That is better than what analysts were expecting and up 9.2 percent from the same period a year ago.

Sales were up throughout the country. In the South, which includes the Washington region, sales rose 9 percent last month.

"Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home," Lawrence Yun, the group's chief economist, said in a statement.

The $8,000 tax credit expires at the end of next month, and industry lobbyists are pushing Congress to extend and expand the program. Without it, the sales momentum could be derailed before the housing sector can make a substantial recovery, the industry argues.

"We would expect higher sales levels to persist through October and into November before collapsing in December if the credit is not extended," Adam G. York, an economist for Wells Fargo, said in a research note.

But some analysts have questioned whether the pickup in sales is being fueled by the tax credit or falling home prices and low interest rates. The tax credit may be pushing some potential buyers to purchase homes earlier than they otherwise would have, rather than generating new sales, they say.

Maine's New Down Payment Assistance Program

AUGUSTA – MaineHousing current popular Gift of Green promotion ends November 30, but the agency will have a new promotion in place to help first-time homebuyers with their down payment and closing costs, MaineHousing Director Dale McCormick said.

Eligible homebuyers need to act quickly if they want to take advantage of the current Gift of Green offer before it changes, said McCormick. Borrowers must have their loan reserved with one of MaineHousing’s participating lenders by November 30 to qualify.

The current Gift of Green promotion provides MaineHousing borrowers with a grant of up to four percent of their mortgage, to a maximum of $5,000, to help pay for the down payment and closing costs on the home they are buying. It also provides them with a coupon for a home energy audit worth up to $500.

“Beginning December 1, our revised Gift of Green promotion will provide all MaineHousing borrowers with a flat amount ? $2,500 ? to help with down payment and closing costs,” said McCormick. “It also will continue providing the $500 gift coupon for home energy audits.”

McCormick noted that about 800 Maine families have used or are using the Gift of Green program to buy their first home, well over the goal of 500 homes MaineHousing set when the program started in mid-June.

She credited strong support for the program from partners such as the Maine Association of Realtors, the Maine Association of Community Banks, and the Maine Credit Union League as one reason for the program’s success.

“This has been the most successful homeownership promotion we ever have offered,” McCormick said. “It came at a very crucial time to help stimulate Maine’s housing market and get potential homebuyers off the fence.”