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One of the key ways to do that is for Congress to extend the home buyer tax credit, "The data on the present home buyer tax credit show that the credit has had its intended impact--sales have jumped in recent months to a projected 5.1 million for the year and housing inventory has been trimmed, thus stabilizing home prices noticeably," Phipps said. He also pointed out that each home sale generates approximately $63,000 in additional economic activity, providing a tremendous economic boost to the national economy.

"But it is a fragile recovery, and now is the time to build on home sales momentum by extending the tax credit throughout 2010 and expanding it to all home buyers," he said. The present credit, due to expire on November 30, cannot help new purchasers now who write a contract today--they won't be able to close before the deadline, and will lose out on the credit, said Phipps.

"Without congressional action now, the market and our national economy may freeze again--possibly as soon as this month."

At the Oct. 20 Senate Committee on Banking, Housing and Urban Affairs hearing, lawmakers and industry leaders raised concerns about the Home Valuation Code of Conduct and whether or not it was hurting the recovery of the nation’s housing markets.

During the hearing, which was titled “The State of the Nation’s Housing Market,” Sens. Jon Tester, D-Mont., and Jeff Merkley D-Ore., brought up concerns about the impact the HVCC agreement was having on residential real estate markets. Particularly there was concern over the quality of appraisals.

In prepared testimony before the committee, National Association of Realtors First Vice President Ron Phipps expressed displeasure over the perceived delay from real estate agents to obtain a completed appraisal report. According to Phipps, since the HVCC went into effect on May 1, “More than one third of Realtors have lost at least one sale because of a delay in the appraisal process.”

Further compounding the matter, according to Phipps, has been the demand on appraisers for quicker turnaround times when submitting an appraisal report. Half of the appraisers who responded to a July 2009 survey distributed by NAR reported that the decreased timeframe to submit appraisal reports affected the quality of those appraisals.

Phipps went on to note how an unintended consequence of the HVCC has been that consumers are now paying more for delayed appraisal reports that may have quality issues.

The number of signed sales contracts in August increased for the seventh consecutive month while home construction had its biggest jump in activity in nearly 16 years, signs that the housing market is beginning to recover from the real estate meltdown.

Driven by low mortgage rates, cheap foreclosures and the $8,000 first-time homebuyer tax credit, the National Association of Realtors sales agreement index reached its highest level since March 2007. Jumping 6.4 percent in August from the previous month to a 103.8 index – 12 percent above the figure recorded during the same period a year ago – the increase surpassed analysts’ forecasts of a 98.6 index. A pending home sales index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales, according to NAR.

In August, pending sales were up 16 percent in the West, 8 percent in the Northeast, 3 percent in the Midwest and nearly 1 percent in the South. Despite the increase in signed sales contracts, with new rules for home appraisals and rigid lending standards reportedly derailing potential sales, completed sales fell 2.7 percent in August. Existing home sales fell for the first time in four months despite hitting its second-highest pace in nearly two years. Conversely, new home sales increased for the fifth consecutive month. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer of future sales.

“Perhaps the real question is how many transactions are being delayed in the pipeline, and how many are being canceled,” Lawrence Yun, NAR’s chief economist, said in a statement. “Without historic precedents, it’s challenging to assess.”

Driven by a 6.2 percent drop in demand for purchase loans and a 0.8 percent decline in refinancing requests, home loan applications fell in the last week of September to a seasonally adjusted 2.8 percent. According to the Mortgage Bankers Association, the average 30-year mortgage rate dropped 0.03 percent to 4.94 percent. During the same period a year ago, 30-year rates averaged 6.33 percent.

Housing experts remain divided on whether the market is on the upswing. Some industry experts predict another fall in sales while others believe the market is gradually recovering. “We’re going to see another leg down, and if we lose the tax credit it will be a significant leg down,” said John Burns, president of John Burns Real Estate Consulting.

From NAR:

HR 3126 Passes House Committee with HVCC Amendment

On October 22, 2009, HR 3126, the "Consumer Financial Protection Act of 2009," passed the House Financial Services Committee with an amendment that will ultimately sunset the Home Valuation Code of Conduct (HVCC). The amendment was offered by Representative Gary Miller (D-CA). During the debate Mr. Miller and Capital Markets Subcommittee Chair, Paul Kanjorski (R-PA), agreed to work on the amendment language before floor consideration to include the appraisal language from HR 1728, the "Mortgage Reform and Anti-Predatory Lending Act." The amendment requires the new Consumer Financial Protection Agency to promulgate and appraisal independence rule within 60 days of enactment of HR 3126. Upon the effective date of the appraisal independence rule the HVCC will sunset.

The number of signed sales contracts in August increased for the seventh consecutive month while home construction had its biggest jump in activity in nearly 16 years, signs that the housing market is beginning to recover from the real estate meltdown.

Driven by low mortgage rates, cheap foreclosures and the $8,000 first-time homebuyer tax credit, the National Association of Realtors sales agreement index reached its highest level since March 2007. Jumping 6.4 percent in August from the previous month to a 103.8 index – 12 percent above the figure recorded during the same period a year ago – the increase surpassed analysts’ forecasts of a 98.6 index. A pending home sales index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales, according to NAR.

In August, pending sales were up 16 percent in the West, 8 percent in the Northeast, 3 percent in the Midwest and nearly 1 percent in the South. Despite the increase in signed sales contracts, with new rules for home appraisals and rigid lending standards reportedly derailing potential sales, completed sales fell 2.7 percent in August. Existing home sales fell for the first time in four months despite hitting its second-highest pace in nearly two years. Conversely, new home sales increased for the fifth consecutive month. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer of future sales.

“Perhaps the real question is how many transactions are being delayed in the pipeline, and how many are being canceled,” Lawrence Yun, NAR’s chief economist, said in a statement. “Without historic precedents, it’s challenging to assess.”

Driven by a 6.2 percent drop in demand for purchase loans and a 0.8 percent decline in refinancing requests, home loan applications fell in the last week of September to a seasonally adjusted 2.8 percent. According to the Mortgage Bankers Association, the average 30-year mortgage rate dropped 0.03 percent to 4.94 percent. During the same period a year ago, 30-year rates averaged 6.33 percent.

Housing experts remain divided on whether the market is on the upswing. Some industry experts predict another fall in sales while others believe the market is gradually recovering. “We’re going to see another leg down, and if we lose the tax credit it will be a significant leg down,” said John Burns, president of John Burns Real Estate Consulting.

The Mortgage Bankers Association weekly index rose 16.4 percent on a seasonally adjusted basis compared to the previous week. And was up 38.4 percent compared to the same week last year.

The unadjusted purchase index increased 12.9 percent compared to the previous week and was 2.2 percent lower than it was a year ago.

The refinance index increased 18.2 percent and was at its highest level since mid-May.

Thirty- and 15-year mortgage rates were well below 5 percent:

• 30-year fixed-rate mortgages decreased to 4.89 percent from 4.94 percent.
• 15-year fixed-rate mortgages decreased to 4.32 percent from 4.34 percent.
• 1-year ARMs increased to 6.56 percent from 6.40 percent.

Extending the First-Time Home Buyer Tax Credit, due to expire at the end of November, is high on the Democratic Congressional to-do list, legislative aides said.

After last Wednesday's meeting with President Obama and House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) released a statement that the government should, "continue efforts to strengthen the housing market by extending the home buyer tax credit."

Mark Zandi, chief economist at Moody's Economy.com, who is a consultant to Democrats in the administration and Congress, is advocating extending the credit through August and making it available to all home buyers. He said failure to extend the credit just as more foreclosures enter the market will push housing prices down.

Also, the House is expected to pass legislation to extend the credit through 2010 for people who have been out of the country in the military, intelligence, or foreign services.