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May Home Sales Down
New Home Sales Down 32.7% in May From April To Adjusted Annual Rate of 300,000 and Down 18.3% From May 2009
Median New Home Price Down 9.6% From May 2009 and Inventory at 8.5 Months.
Northeast New Home Sales Down 33.3% From April
By JEFF BATER And DARRELL A. HUGHES
New-home sales plunged in May to a record low, as buyers faced a lackluster job market without a longtime government subsidy for purchases.
Sales tanked by 32.7% from the previous month to a seasonally adjusted annual rate of 300,000, the Commerce Department said Wednesday.
The decline exceeded what had been dire expectations, and is likely to raise fears about housing. The sector is a sore spot within the broader economy, which suffered painfully weak job growth and floundering retail sales in May. Investors have been seeking safe haven amid worries about the economic recovery. On Tuesday, the U.S. Treasury sold $40 billion in two-year notes. Bids submitted for the auction were 3.45 times the amount of offer, the highest since October 2009.
The sharp decline was worse than expected. Sales were down across all four regions. Economists surveyed by Dow Jones Newswires had estimated sales would fall 20.6% to 400,000 because of the April 30 end of a tax credit for first-time buyers that was enacted in February 2009 and extended.
The level of 300,000 homes sold was the lowest since the government begin compiling this data in 1963. The 32.7% decrease was also a record.
The sharp drop followed two big increases that reflected buyers rushing to market before the tax credit expired. April sales rose 14.7% to 446,000, revised down from an originally reported 14.8% to 504,000. March sales climbed 12.1% to 389,000.
Year over year, sales were down 18.3%.
The median price for a new home decreased, year over year, in May by 9.6%, to $200,900 from $222,300 in May 2009.
Inventories of new homes slid 0.5% in May to an estimated 213,000 homes for sale, from 214,000 at the end of April. But because of the severe sales drop the months' supply at the current sales rate leaped to 8.5 from a revised 5.8 in April.
Regionally, new-home sales plunged 23.9% in the Midwest, 53.2% in the West, 25.4% in the South, and 33.3% in the Northeast.
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