In the first month since the tax credit ended, new home sales decreased 33 percent to record lows, according to the Commerce Department.
The Associated Press reports that the sales dropped from April to May to a seasonally adjusted annual sales pace of 300,000– the slowest on record since 1963, and the largest month-to-month decline reported.
Although economists surveyed by Thomson Reuters had expected sales to wane after the tax credit, they only projected them to sink to a sales pace of 410,000. Real estate and interest rate analyst at Weiss Research, Mike Larson, wrote, “We all knew there would be a housing hangover from the expiration of the tax credit, but this decline takes your breath away.”
Nationwide, new home sales took a dip in May, falling 53 percent from the previous month in the West, 25 percent in the South, 24 percent in the Midwest and 33 percent in the Northeast.
The number of new homes available for sale dropped 0.5 percent to 213,000 as builders cut back significantly amidst worries about the housing market. The median sales price in May was down 9.6 percent from the previous year and 1 percent from April to $200,900.
- Jana Schreiber, Move Trends-Getter
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