You gotta give homebuyers credit, but it didn't help

LOS ANGELES - The chief executive officer of Hovnanian Enterprises Inc. said yesterday that a final push by homebuyers in April to qualify for a government tax credit didn't give the homebuilder's sales as big a boost as he'd hoped.

The company's new-home contracts tumbled 17 percent in the February-April quarter versus a year ago. Excluding communities that are no longer open, new contracts were flat, however.

Those results exceeded the builder's internal projections, but still disappointed.

"I'd be less than candid if I didn't say we were hoping for better sales due to the impact of the homebuyer tax credit," CEO Ara Hovnanian said.

The tax credit - $8,000 for first-time homebuyers and $6,500 for repeat buyers - helped stoke sales for homebuilders this spring. In April, new-home sales nationwide jumped 14.8 percent; in March, new home sales posted the biggest monthly increase in 47 years.

The government incentive expired April 30, although homebuyers have until June 30 to close on their purchase. That had many builders anticipating that they would see a spike in sales as buyers raced to qualify for the credits.

Hovnanian said the deadline pulled some home sales forward into April, and that appears to have sapped some of the sales that ordinarily might have happened in May.

The builder's sales per community were slower last month than a year earlier.

Many experts anticipate that home sales will decline in coming months now that the government incentive has ended. New Jersey lawmakers are working to enact a $15,000 tax credit of their own.

Regardless, high unemployment and job insecurities continue to keep many buyers on the fence.

Management said that home prices remain stable in most of the company's markets, which has helped raise its profit margins and led to smaller write-downs. The builder also saw a lower rate of cancellation on new home contracts than a year earlier.