Inventory growth outpaces home sales surge

So the good news is existing home sales were up 7.6 percent for April -- no surprise. That was the last month home buyers could take advantage of the tax credit.

Unfortunately, more sellers than usual tried to get in on the game, too, with inventories surging 11.5 percent from March to an 8.4 month supply (up 2.7 percent from a year ago.) And with the impending crash in sales in wake of the credit's expiration, it could get ugly this summer.

We'll get our first official look when new home sales come out for May. Existing home sales will take longer to reflect the decline, because they are reported at closing, while new sales are reported at contract signing. That means home sales should remain inflated through June, although we're already hearing anecdotally about the immediate impact this is having on sales, with builders cutting prices to try to bring people in the door.

It's the reason I was against renewing the tax credit last time -- it's a temporary fix that simply moves demand forward and we're all going to pay for it now. (I'd link to one of my many rants against it, but HousingZone has been wiped from the face of the earth.)