New Home Sales Decline

OR IMMEDIATE RELEASE
CONTACT: Paul Lopez
202-266-8409
plopez@nahb.org
www.nahb.org

New-Home Sales Decline in May

WASHINGTON, June 23 – Sales of newly built, single-family homes declined
dramatically in May following the expiration of a popular home buyer tax
credit program in the previous month, according to newly released figures by
the U.S. Commerce Department. The data show that sales fell 32.7 percent to
a seasonally adjusted annual rate of 300,000 units, the lowest number on
record since the government started keeping track in 1963.

“While today’s numbers are sobering, they were to be expected at the
conclusion of the tax credit program and are in keeping with the results of
our latest home builder surveys,” said Bob Jones, chairman of the National
Association of Home Builders (NAHB) and a home builder from Bloomfield
Hills, Mich. “Clearly the tax credits were very successful in drawing
potential buyers back to the market. Now we are seeing the lull in activity
you’d expect following the program’s expiration.”

“The big drop-off in new-home sales this May emphasizes how effective the
tax credit program was in bringing home buyers back to the market while it
was in existence,” agreed NAHB Chief Economist David Crowe. “Because many
buyers moved quickly to take advantage of the tax credits, sales that would
have taken place in May or June were likely pulled forward to meet the
program’s deadline – which is why we have been projecting softer sales
numbers for the second quarter. But once this ‘hangover’ subsides, we do
believe that the improving economy, rising employment, excellent mortgage
rates and stabilizing home values will be strong incentives that will
encourage home buyers to return to the market.”

Sales of new homes declined across every region in May. The Northeast
registered a 33.3 percent decline, the Midwest a 23.9 percent decline, the
South a 25.4 percent decline, and the West a 53.2 percent decline.

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.

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ABOUT NAHB: The National Association of Home Builders is a Washington-based
trade association representing more than 175,000 members involved in home
building, remodeling, multifamily construction, property management,
subcontracting, design, housing finance, building product manufacturing and
other aspects of residential and light commercial construction. NAHB is
affiliated with 800 state and local home builders associations around the

country. NAHB’s builder members will construct about 80 percent of the new
housing units projected for 2010.