Builders suffered some major whiplash earlier this summer when the first-time homebuyer tax credit ended. We all knew that sales would fall off from the scurrying to buy last fall and earlier this spring, but no one expected new home sales to fall off a cliff. Luckily for builders, sales were able to recover quickly in June.
First, let’s look at how ugly May was. Shobana Chandra and Timothy R. Homan of Bloomberg News gave us some amazing numbers. New home sales dropped 33%, to an annual pace of 300,000, “the fewest in data going back to 1963, figures from the Commerce Department showed…” As reported in the article, the Fed has been doing everything they can to keep rates down, otherwise things would have been worse (if that was possible).
But what goes down, must come up and the news in June was brighter. Courtney Schlisserman also of Bloomberg wrote that new home purchases rose 24 percent in June as the annual pace of sales rose to 330,000. All areas in the US saw a sharp increase in new home sales, except the West. It actually experienced a drop of 6.6 percent from May.