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Economy in Brief

U.S. New Home Sales Fall With Tax-Credit Expiration To Record Low
by Tom Moeller June 23, 2010

New home sales fell by nearly one-third last month versus April with the end to the Federal government's $8,000 home-buyer tax credit. New home sales at 300,000 followed a downwardly revised 446,000 during April. It was a record low for the series which dates back to 1963. The latest level was well short of Consensus expectations for 420,000 sales.

Price discounts accompanied the decline in May sales. The median home price fell 1.0% m/m to $200,900 following April's 10% decline. The latest was the lowest price level since December 2003. The average price of a new home held up at $263,400 (-4.1% y/y).

At the current sales rate, the months' supply of unsold homes jumped to 8.5 from 5.8 in April but remained well below the 2009 high of 12.1 months. Moreover, it still took a near-record median 14.2 months to sell a new home during May.

The data in this report are available in Haver's USECON database.

Challenges in Economic Capital Modeling from the Federal Reserve Bank of San Francisco can be found here.

US New Homes May April March Y/Y 2009 2008 2007
Total Sales(SAAR, 000s) 300 446 389 -18.3% 372 481 769
Northeast 28 42 33 12.0 32 35 64
Midwest 51 67 54 6.3 54 69 118
South 170 228 209 -16.7 201 264 409
West 51 109 93 -43.3 87 113 178
Median Price(NSA, $) 200,900 202,900 225,400 -9.6% 214,500 230,408 243,742
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