New-Home Sales Dip 33% in May
*Editor's note: This report includes excerpts from a National Association of Home Builders press release Sales of newly built, single-family homes declined dramatically in May following the expiration of a popular homebuyer tax credit program in the previous month, according to newly released figures by the U.S. Commerce Department.
The data show that sales fell 32.7 percent from April to a seasonally adjusted annual rate of 300,000 units, the lowest number on record since the government started keeping track in 1963. That figure combined with an annualized 5.66 million existing home sales for May (according to NAR) means that new-home sales comprise just five percent of the real estae market. "While today's numbers are sobering, they were to be expected at the conclusion of the tax credit program and are in keeping with the results of our latest home builder surveys," says Bob Jones, chairman of the National Association of Home Builders (NAHB). "Clearly the tax credits were very successful in drawing potential buyers back to the market. Now we are seeing the lull in activity you'd expect following the program's expiration." Sales of new homes declined across every region in May. The Northeast registered a 33.3 percent decline, the Midwest a 23.9 percent decline, the South a 25.4 percent decline, and the West a 53.2 percent decline. The nationwide inventory of new homes on the market declined by half a percent to 213,000 units in May; this was the lowest level in nearly four decades. However, because of the slower sales pace, the months' supply of homes rose from 5.8 in April to 8.5 in May.
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