Lawrence Yun, NAR chief economist, said the projections are enhanced by a tax credit expansion to more home buyers through the middle of 2010. “In fact, the credit is working better than first projected — it now looks like we’ll have 2.3 to 2.4 million first-time buyers this year,” Yun said.

A consumer study by the NAR shows that first-time buyers accounted for a record 47 percent share of home sales over the past year, up from 41 percent in the 2008 survey. The share has risen steadily since a cyclical low of 36 percent in 2006.

Existing-home sales are expected to total 5.01 million in 2009, a gain of 2 percent over last year, and then are forecast to rise 13.6 percent to 5.69 million in 2010. “A steady draw down of inventory will help home values to turn positive in 2010, but risks such as unemployment remain in the economy,” Yun said.

New-home sales are projected at 397,000 this year, recovering to 549,000 in 2010. Housing starts, including multifamily units, should total 564,000 units this year but grow to 752,000 in 2010.

The 30-year fixed-rate mortgage will probably average 5.3 percent in the fourth quarter, rising gradually to 5.8 percent by the end of next year, NAR reported, adding that its housing affordability index will set a record in 2009, averaging 30 percentage points higher than 2008. Affordability will decline from record highs next year but will remain at historically attractive levels for home buyers.

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While nothing has been finalized quite yet, I wanted to keep you posted on the latest information available on the $8,000 homebuyer tax credit extension/expansion.  As of this morning, the House of Representatives has approved legislation that would extend AND expand the $8,000 Homebuyer Tax Credit.  The House vote comes after the Senate voted yes on Monday night and while there is more work to be done, word on the street is that an agreed upon bill should reach the President for his signature by the end of this week.  Here’s what has been agreed upon so far:

Under the proposal, individuals with income up to $125,000 a year and couples earning up to $225,000 would be eligible for the credit.  The extension would cover homes under contract by April 30th and closed by June 30th, 2010.  The $8,000 Homebuyer Tax Credit would also be expanded to non-first time homebuyers as well.  There are a few tweaks for these folks though; the homebuyer tax credit would be reduced to $6,500 from $8,000 AND they must have owned a home for at least five of the past eight years.

Please remember, this is NOT final and even if it is approved, changes could still be made at the last minute.  As soon as the final bill has been approved and signed off on, I will let you know here at www.azhomebuyercoach.com

Bob Mangold

(602) 291-4362