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New home sales jump 14.8% with help of expiring tax credit

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Sales of new homes surged 14.8% in April over the prior month as an expiring federal tax credit for buyers helped fuel activity. Without the popular incentive, many analysts are expecting sales to slump in months to come.

“Clearly, government handouts have had their desired effect: They juiced home sales and helped builders clear out even more inventory,” said Michael D. Larson, an interest rate and housing analyst with Weiss Research. “We’re also going to see yet another hangover in the coming couple of months due to the tax credit’s expiration, with sales rates dropping off.”

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Sales of new single-family houses were sold at a seasonally adjusted annual rate of 504,000 units, the Commerce Department said. That was a jump of 47.8% above the April 2009.

The median sales price of new houses sold in April 2010 was $198,400, and the inventory of new homes for sale at the end of April was 211,000, representing a five-month supply.

-- Alejandro Lazo

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