Sales of new homes in May plunge 33 percent

[SarahB]

Source: MSNBC

Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits.

The bleak report from the Commerce Department is the first sign of how the expiration of federal tax credits could affect the nation's housing market.

The credits expired April 30. That's when a new-home buyer would have had to sign a contract to qualify.

"We fear that the appetite to buy a home has disappeared alongside the tax credit," Paul Dales, U.S. economist with Capital Economics," wrote in a note. "After all, unemployment remains high, job security is low and credit conditions are tight."

New-home sales in May fell from April to a seasonally adjusted annual sales pace of 300,000, the government said. That was the slowest sales pace on records dating back to 1963. And it's the largest monthly drop on record. Sales have now sunk 78 percent from their peak in July 2005.

Read more: http://www.msnbc.msn.com/id/37867779/ns/business-real_estate/

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But don't worry, the recovery's underway!

[burnsei sensei]

1. I'm sure it's a great recovery,

a real Renaissance, for the rich.

[Aramchek]

2. It's the end of the World!!!

[Donnachaidh]

3. yeah -- the recovery SURE is working, ain't it?

And for the sarcasm impaired :sarcasm:

[Tempest]

5. Yes, it is

Construction starts are up, manufacturing is up, sales of durable goods is up, employment is slowly growing and businesses are anticipating increased hiring.

[Name removed]

6. Deleted message

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[Tempest]

7. So one measure is down and the sky is falling to you?

Did you even read why the sales are down?

[Name removed]

12. Deleted message

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[TerribleLarryDingle]

8. You seem really pleased.

Glad to know you care.

[Donnachaidh]

11. new recruit for the swarm?

:rofl:

[Name removed]

10. Deleted message

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[PSPS]

4. This is yesterday's news, actually. You should have heard the NAR spin this.

The M$M, heavily dependent on ad revenue from realtors, always has some industry shill from the National Association of Realtors on to "explain the numbers." And, as usual, they twist even these numbers into some reason to "buy now!!11!! It's a great time to buy!!11!!!"

The fact is that the only thing propping up the housing market is these silly government taxpayer giveaways. People think they are "saving money with the tax credit" when, in fact, it is just raising the price of the house. Housing is still overpriced because of these shenanigans.

The only thing that will "fix" the housing market is to bring prices in line with incomes (now that you can't get a liar's loan anymore.) There's only two ways to do that: Increase in wages (not likely with 20% U-6 and jobs going overseas -- wages have been stagnant or declining for 30 years) or decrease in housing prices (which is what will happen eventually after the taxpayer giveaways stop because wages won't be going up.)

[Lagomorph]

9. We bought a modest home.

We did one re-fi after the interest rates dropped to half of what we were paying. We didn't use it as a cash machine but we did make a few improvements. Even after values dropped over 20% we're still not upside down. The trade off is, it's a little crowded at times, not a lot of extra space to enjoy.

[rayofreason]

13. Double-dip, here we come! n/t