Purchases of U.S. new homes fell in May to the lowest level on record after a tax credit expired, showing the market remains dependent on government support.
Sales collapsed an unprecedented 33 percent from April to an annual pace of 300,000, less than the median estimate of economists surveyed by Bloomberg News and the fewest in data going back to 1963, figures from the Commerce Department showed today in Washington. Demand in prior months was revised down.
Stocks dropped and Treasuries rose as the report added to signs of weakness in the economy, including a decline in retail sales and a slowdown in private job growth. A lack of inflation and concern over unemployment and housing were among reasons Federal Reserve policy makers renewed a pledge today to keep interest rates near zero for an “extended period.”
Full story: Sales of U.S. New Houses Plunge to Lowest Level on Record – Bloomberg