American house sales jump to a five month high on the back of tax credit

AMERICANS rushed to benefit from a tax credit for first-time homeowners during April, pushing house sales up 7.6 per cent.

The five-month high is due in part to an $8,000 (£5,540) offer of government-funded credit for new homeowners, which expired on 30 April.

The increase in sales was the highest jump in a decade and left purchases nearly 23 per cent up on April 2009, according to figures released by the National Association of Realtors (NAR).

Opinions are mixed over whether the surge will continue once the tax credit scheme has been withdrawn.

“No doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” said Laurence Yun, chief economist for NAR.

He added: “There has been a return of buyer confidence with stabilising home prices, an improving economy and mortgage interest rates that remain historically low.”

The median house price in the US was $173,100 last month, up four per cent on April 2009.