The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007 when it was 100.7.
NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit.
It makes me wonder two things:
1) If these 350,000 home sales wouldn't have happened at all without this program, then how likely will these people be of defaulting on their mortgages in the near future?
2) How much of the remaining 1.5 million first-time home buyer purchases are simply moving future demand up to the present?
Note: This first-time home buyers program ends at the end of November, but to take advantage of it you must have your paperwork in by the start of October.