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Economy in Brief

U.S. New Home Sales Soar With Pending Tax Credit Expiration
by Tom Moeller May 26, 2010

The April end to the Federal government's $8,000 home-buyer tax credit, like in March, caused new home sales to surge. New home sales jumped 14.8% m/m to 504,000 following the upwardly revised 29.9% advance during March. The latest level was the highest since May 2008. The latest sales level greatly exceeded Consensus expectations for 425,000 sales.

Price discounts likely helped sales during April. The median home price fell nearly 10% m/m for a 9.5% y/y decline. Firmer sales & lower prices have been quite successful in lowering the number of homes on the market to the lowest level in forty years.

At the current sales rate, the months' supply of unsold homes dropped to 5.0 from its 2009 high of 12.1 months. However, despite all this improvement, it still took a near-record median 14.3 months to sell a new home in April.

Central Bank Independence, Transparency, and Accountability is today's speech by Fed Chairman Ben S. Bernanke and it can be found here.

US New Homes April March February Y/Y 2009 2008 2007
Total Sales (SAAR, 000s) 504 439 338 47.8% 372 481 769
  Northeast 39 39 31 85.7 31 35 64
  Midwest 75 57 49 87.5 54 69 118
  South 278 251 170 38.3 201 264 409
  West 112 92 88 41.8 87 113 178
Median Price (NSA, $) $198,400 $219,600 $219,700 -9.5 214,500 230,408 243,742
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