Existing home sales soar in April

NEW YORK (CNNMoney.com) -- Existing home sales soared in April as home buyers scrambled to claim the tax credit that expired at the end of the month, according to a real estate industry report released Monday.

The National Association of Realtors reported that existing home sales jumped 7.6% last month to a seasonally adjusted annual rate of 5.77 million units, up from the upwardly revised rate of 5.36 million in March. Sales year-over-year were up 22.8%.

The gain was widely anticipated, but still beat forecasts. Analysts surveyed by Briefing.com were looking for resales in April to rise to an annual rate of 5.65 million units.

"The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market," said Lawrence Yun, NAR chief economist. "For people who were on the sidelines, there's been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low."

The home buyer tax credit, which expired April 30, pushed sales up during the month since buyers had to sign contracts by the end of last month. First-time home buyers qualified for a tax credit up to $8,000, while those trading up could score as much as $6,500.

Despite the termination of the tax credit, NAR president Vicki Cox Golder also anticipates buyer traffic to hold up in May and June.

"Some realtors tell us they are very busy with clients who are entering the market now as a result of improved conditions, while others are welcoming a slowdown from frantic market conditions in recent months," she said.

Price and inventory: The NAR report showed that the median price of homes sold in April was $173,100 in April, up 4% from a year ago. About a third of homes sold during the month were distressed properties.

Total housing inventory rose 11.5% to 4.04 million existing homes for sale. That represents a 8.4-month supply at the current sales pace, up from a 8.1-month supply in March.

Yun said that although inventories remain higher than normal, the house pricing correction is nearly over.

"In fact, a majority of the markets have seen price gains lately," he added. "A return to old-fashioned responsible lending and buying will help the housing market avoid disruptive and painful bubble-bust cycles."

Sales by property and region: Sales of single-family homes rose 7.4% in April compared to the prior month, while condominium and co-op sales spiked more than 9%.

The Northeast fared best last month, with sales surging 21.1% to an annual level of 1.09 million units in April, which was 41.6% higher than a year earlier.

Resales in the Midwest climbed nearly 10% last month, while they rose 8.6% in the South and 6.2% in the West.