New Home Sales Jump in April 14.8 Percent

That's a pretty impressive rise in sales... regardless I do not think this number is sustainable or accurately represents the market moving forward...

It makes sense that home sales surged in the month of April. We may even see healthy numbers in the month of May, slowly tapering off in the month of June. Come July these numbers will most likely fall to much lower levels... This surge is fueled by the tax credit - plain and simple. As the tax credit was written you had to be in contract by April 30 and close contract by June 30. The saving grace of the real estate market right now is interest rates... some of the lowest in recorded history. With equities markets in question, a flight to safety has lead investors into long term markets namely treasury and mortgage backed securities. It is the influx of capital into the mortgage backed securities market that has brought rates down. This fact is troubling because if Europe gets there act together across the Atlantic and stabilizes, we will see less demand for treasuries which will bring the yield back up, which will indirectly encourage a sell of of mortgage backed securities which will lead to higher interest rates for home buyers... People need to forget about the tax credit. It is over (unless you are in the armed forces - then it has been extended until April 2011 with certain contingencies in place that must be met), you should not be buying a home for a tax credit anyway, it is first and foremost shelter, then an investment. Securing a low fixed interest rate now on you home is probably one of the smartest decisions one can make. When inflation hits, and it will with a vengeance, those with fixed rates will find themselves in a very lucrative position. It is a buyers market regardless of this expired tax credit.