May New Home Sales Lowest on Record

May New Home Sales collapsed to just 28,000. This is the lowest number on record and going back all the way to 1963.

The Census Bureau reports:

Sales of new single-family houses in May 2010 were at a seasonally adjusted annual rate of 300,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 32.7 percent (±9.9%) below the revised April rate of 446,000 and is 18.3 percent (±13.0%) below the May 2009 estimate of 367,000.

The median sales price of new houses sold in May 2010 was $200,900; the average sales price was $263,400. The seasonally adjusted estimate of new houses for sale at the end of May was 213,000. This represents a supply of 8.5 months at the current sales rate.

NOTE: April was revised down to 446,000 from a previously-reported 504,000 pace.

Bloomberg adds:

Sales collapsed a record 33 percent to an annual pace of 300,000 last month from April, 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.

The end of a tax incentive worth as much as $8,000 means the market will now be dependent on gains in employment, which are needed to lift incomes, brace confidence and contain foreclosures. A lack of inflation and concern over jobs and housing are among reasons Federal Reserve policy makers may reiterate a pledge to keep interest rates near zero.

“We see no chance of a quick, sustained recovery, though we are hopeful there is little further downside” Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd. in Valhalla, New York, said in a note to clients. “The next few months are likely to be very grim.” Shepherdson correctly forecast the drop in sales.

…

Sales were projected to drop 19 percent to a 410,000 annual pace, according to median estimate of 76 economists surveyed by Bloomberg News. Forecasts ranged from 300,000 to 530,000.

…

The median sales price decreased 9.6 percent from the same month last year, to $200,900, today’s report showed.

Purchases dropped in all four U.S. regions last month, led by a record 53 percent drop in the West.

Charts from Calculated Risk:

On prices, the New York Times points out:

The median sale price for a new home fell 1 percent in May from April, to $200,900. In the 12 months to May, prices fell 9.6 percent, the largest decline since July 2009.