Wednesday, June 23, 2010

New Home Sales Collapse 33% To Record Low

This morning's post was about May's drop in existing home sales and the economic indications of housing's "double dip"--sales and prices going down.  And now this: May new home sales plunged after the Homebuyer Tax Credit expired April 30.  Not only was the decline from April to May the worst on record, but sales dropped nearly 19% from May 2009.  And as the linked CNBC article points out,
Last month's weak sales pace saw the supply of homes available for sale jumping a record 46.6 percent to 8.5 months' worth, the highest in nearly a year, from 5.8 months' worth in April. However, the number of new homes on the market dipped 0.5 percent to 213,000 units, the lowest since November 1970.
 Below is CalculatedRISK's graph of monthly new home sales, Not Seasonally Adjusted.  Click for larger image in new window.

CalculatedRISK also has a graph that shows new and existing home sales; the term "distressing gap"  initially referred to distressed sales (foreclosures, short sales) that kept new home sales lower because the distressed sales were so much cheaper.  Click for larger image in new window.

It looks like The Fed will leave interest rates unchanged for years, so here are some other things to read.


Anonymous said...

Serious Buyer:
Dan Alpert forecast for markets that haven't retreated yet (i.e., Charlottesville?)

"Housing Cheapest in 40 years but renting still beats buying"

Anonymous said...

Renting beats buying by a longshot in the Cville area esp. if you're not a student and at this point in the year. Those mortgages must be paid.