Thanks to the upcoming April 30 expiration of the government’s new-home-buyer tax credits, in March the U.S. just experienced the sharpest spikes in new home sales back to 1963.
According to the U.S. Census Bureau, new homes sales leaped at an annualized 27% rate in March. You’ll see this below, on the right. It’s clearly an abnormally high jump — welcome to the distorting force of government in markets. People were rushing to buy ahead of the April 30th deadline to qualify for the tax incentives.
Thing is, this isn’t healthy buying behaviour. Given we just came off a housing mania, creating new mini-buying manias seems a bit dangerous. It’s kind of like taking shots to cure a hangover.
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