New Home Sales at lowest level ever recorded

New home sales plunged 32.7% in May to 300,000 units, the lowest level in the 47-year history of the data series. Sales dropped sharply in all major areas with the largest decline in the West.

BOTTOM LINE:

May’s plunge in new home sales reflects the expiration of the homebuyers’ tax credit for signed contracts and the fact that home sales were probably borrowed forward ahead of the end of the tax credit. We think it will take until late Summer before we will get a better picture of underlying (without government support) new home sales trends.

Source RDQ

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