NEW YORK — With the expiration of the home-buyer tax credit looming Friday, the nation's real-estate market has been sent into a frenzy, with buyers and sellers rushing to sign deals before midnight.

"It's gone nuts," said Lew Reich, an agent with Keller Williams Realty in Plano, Texas. "We're seeing a very strong rush, strong sales, a lot of people are being energized by the end of the credit."

Contracts must be signed by Friday, while closings must take place by June 30. Looking to sign last-minute deals, Lennar Corp. is keeping some of its sales offices open until midnight, while KB Home extended hours on Thursday and Friday.

So far, it isn't clear just how effective the tax credit has been. Sales of new single-family homes jumped 27% last month, the Census Bureau reported, but that estimate is based on a small sample and is frequently subject to large revisions. The tax credit has been most effective with first-time buyers who aren't stuck with an existing home to sell. The National Association of Realtors projects the credit will spark 900,000 such purchases this year, on top of two million last year. In addition, 2010 will see 1.5 million repeat purchasers.

The end of the tax credit has many worried that the housing market, which is showing early signs of stability, will soften again. Critics complain that the buying incentives simply pulled demand forward, so buyer traffic could plunge come Saturday. Meanwhile, many of the same headwinds remain: Unemployment is elevated and the foreclosure crisis continues.

It will also be interesting to see what happens when the government is no longer dangling incentives before buyers, something that has been occurring for some time: Congress initially passed a $7,500 tax credit for first-time buyers two years ago, which had to be repaid over 15 years. Then, last spring, Congress extended the credit, expanded it to $8,000 and waived the repayment requirement. When that was set to expire on Nov. 30, Congress extended it again and added a $6,500 tax credit for move-up buyers.

The credit won't be extended — for now, at least. The National Association of Home Builders has said it isn't currently lobbying for another round. Some consider that a good thing because a more normal market will result.

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