New Home Sales Tank 32.7% from Last Month

New Home Sales dropped to a record low of 300,000 in May 2010. This is 32.7% below April's sales figures.




The median price for a home was $200,900, the average sales price was $263,400 and the inventory is at 8.5 months. This is a 46.6% inventory increase from last month.

Market Watch:

Home builders continued to shed inventories in May, cutting the number of unsold homes by 0.5% to 213,000, the lowest level in 39 years. In the past year, inventories are down 27%, while sales are down 18%.

The $8000 dollar home buyers tax credit expired, but even so, these are terrible numbers.

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It was even worse than that

Past month sales were revised lower as well:

The report also featured large downward revisions to sales rates for April (446,000 vs. 504,000 previously) and March (389,000 vs. 439,000) that raise questions about the power of this stimulus, which was extended from a November 30 deadline (for completed sales) to April 30 (for signed contracts) and June 30 (for completed sales).

The median sale price for a new home is now at its lowest level since 2003.

median price, still $200k

existing home sales median price was $179k.

With wages stagnant plus unemployment so high, that's still a house payment of about $1600 a month around, with property taxes and insurance.

Who can afford that? Also, property taxes are out of control in many regions.

Why not direct lending?

If the Fed is interested in reflating the housing market, and wants low interest rates to "rebuild capital," why not rebuild the capital of the American people by a program of direct lending through public intermediaries? Let the Fed guarantee mortgages at 1 percent over the 10 year Treasury -- that's a 33% markup at the current rate for the 10 year bond. Banks could service government-issued mortgages. Yes, it would cut them out of the origination loop and deprive them of the array of fees they charge for largely fictitious products like title insurance-over-and-over again, but it might benefit the Americans who are struggling with usurious rates to keep their homes and bring home buyers into the market. And then there are local governments in hard-hit areas that might see an increase in revenues

Frank T.

because anything that makes sense

and takes money out of the pocket of the Banksters is automatically dismissed!

(great idea).

Dutch Tulip Mania - Usurers Run Things.

See "Wealth of Nations" on the Dutch Tulip Mania.
It does not matter if you can afford it. It is a matter of whether you can actually buy real estate. A humane form of government would find ways to make shelter available. This might involve
adjusting the amortization of mortgages for partial pay-off, with ReFi. Usurers and speculators will never allow any such notion.

Burton Leed