The anecdotal evidence from many builders suggesting a precipitous drop in traffic in May was correct: New-home sales took a record-breaking nosedive once the federal homebuyer tax credit expired at the end of April.
The Commerce Department reported Wednesday that sales of new single-family homes dropped a record 32.7% to a seasonally adjusted annual rate of 300,000, the lowest rate ever recorded by the government. A big drop was expected: Analysts were expecting a rate of 410,000, which would have been a decline of approximately 20%.
Prices also fell, with the median down 9.8% from April to $200,900 and the average price down from $265,200 to $263,400.
Months-supply shot up 46.6% to 8.5 from April's 5.8 but remains 10.5% below the 9.5-month supply of May, 2009.
Sales plummeted across all regions. The Northeast was down 33.3% from April but still up 12% from May, 2009. The Midwest was down 23.9% from April but up 6.3% from last May. The South, the largest region in terms of sales, was down 25.4% month-to month and down 16.7% year-over-year. The West dropped 53.2% from April to May and was 43.3% behind the pace of last May.
Median months for sale fell back slightly to 14.2 from 14.3 in April.