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New-Home Sales Decline In May
Largely offsetting the gain recorded in April, sales of newly built, single-family homes fell 2.5% in May to a seasonally adjusted annual rate of 512,000 units, the Commerce Department reported last week.
“The fact that new-home sales are occurring at such a slow pace in the middle of the home buying season, with inventories only barely inching downward, is a strong indication of just how critical it is for Congress to move forward immediately with housing stimulus legislation,” said NAHB President Sandy Dunn.
A bill under consideration in the Senate contains the crucial element of a temporary home buyer tax credit, which would help shrink inventories of unsold units and reduce housing’s significant drag on economic growth.
“The nation’s housing market clearly continues to display fundamental weakness, and May’s sales numbers are in line with what builders have been telling us in our regular surveys,” said NAHB Chief Economist David Seiders.
“Home builders have been doing everything they can to limit the production of new units and move existing inventory, but it hasn’t been enough to make a significant dent in the backlog yet,” Seiders continued. “A temporary home buyer tax credit would help release some of the pent-up demand among potential buyers who are holding off on a home purchase in hopes of prices going lower. This, in turn, could provide a significant shot in the arm for the overall economy.”
Commerce’s report indicated that the inventory of new homes for sale fell 1.7% in May to 453,000 units, which is a 10.9-month supply at the current sales pace.
Regionally, sales were down 7.9% in the Northeast and 11.6% in the West in May. Sales gained 5.1% in the Midwest and rose a marginal 0.4% in the South.
 Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview).
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To learn more, visit www.HousingEconomics.com.
 Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.
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