The Commerce Department reported(.pdf) that new home sales plunged 33 percent to an all-time low in May following the expiration of the government’s homebuyer tax credit in April. If not for the massive downward revision to the April sales total, from an annual rate of 504,000 to 446,000, the monthly decline would have been more than 40 percent!
As it was it was bad enough, the May sales rate of 300,000 coming in well below the previous record low from January of 2009 – during the depths of the Great Recession – at 339,000 units. In population-adjusted terms, the May new home sales total represents a decline of about 50 percent from the pre-2008 low of 400,000 seen in January of 1991. It’s hard to believe that, before the housing boom went bust, homebuilders were selling well over a million new homes a year.
