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May saw a big slump in the trade volume of new houses in the U.S., as the government's tax credit expired.
The U.S. Department of Commerce says the trade volume of new houses in May plunged nearly 33 percent to a historical low. The government's tax credit of up to 8,000 dollars caused a real estate revival this spring, but that appears to be now over. Sales of previously owned U.S. homes fell unexpectedly last month, but supply also dropped.
The government's tax credit clearly pulled forward demand, and it will take some time to find fresh buyers. If there is any silver lining, it's that home builders have also cut back sharply. This will help balance out the excess number of houses for sale.
- U.S. new home sales down 33% in May 2010-06-24