This is the kind of report that must be making developers sweat.
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.
A consensus of economists surveyed by Briefing.com had expected May sales to slide to an annual rate of 430,000.
Home sales had surged in March and April as homebuyers scrambled to sign contracts ahead of the April 30 deadline for the tax credit. First-time homebuyers qualified for a tax credit up to $8,000, while repeat buyers could get as much as a $6,500 break. via CNN Money
New home sales were expected to head south when the new home buyer tax credit expired, but not the month right after, and not when all these homes need to close. The 32.7% seasonal decline to 300,000 is a level inconceivable to the industry.
This is a drop of 18 percent from last year, one of the weakest on record.
Update from NAHB:“
The nationwide inventory of new homes on the market declined by half a percent to just 213,000 units in May; this was the lowest level in nearly four decades. However, because of the slower sales pace, the months’ supply of homes rose from 5.8 in April to 8.5 in May.