Thursday, June 24, 2010

May New Home Sales Down

The US Commerce Department reported that new home sales declined to a record low in May, the first month following the expiration of the homebuyer tax credit. This snapped a two-month streak of gains.  Homebuyers have until June 30 to close deals, but the Senate may vote to push that deadline back to Sept. 30.

New home sales declined 32.7% to a seasonally adjusted annual rate of 300,000 last month, down from an downwardly revised 446,000 in April.  Sales year-over-year fell 18.3%.  This is the slowest sales pace since the Commerce Department began tracking data in 1963. The prior record was set in September 1981, when new homes sold at an annual rate of 338,000.

Anika Khan, an economist at Wells Fargo, expects home sales to remain depressed through the third quarter as home construction continues to contract and lending standards remain tight. But, she said, sales should pick up slightly in the fourth quarter.   She added that numbers are years away from a normal level of new home sales -- an annual rate between 800,000 and 900,000.

This news means builders are anxious to move inventory.  Contact me to talk about new home developments in Mercer County and how you can be in a new home this summer.

Joe Giancarli, Sales Associate

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