New home sales stay near the 50-year low
New home sales are down 8.1 percent since October and 28.5 percent below this time a year ago.
This graph shows new home sales (blue line, left y-axis) and the year-to-year change (orange area, right y-axis) for the past two decades. This low, from May 2010 till the present, is the lowest in the fifty years on record. Did the government's tax credit inject so much uncertainty into the housing market that it preventing the natural market clearing mechanism from playing out?
SoldAtTheTop / The Paper Economy
Today, the U.S. Census Department released its monthly New Residential Home Sales Report for October showing continued weakness with sales declining 8.1% since September to 283K annualized units, very near the lowest level on record.
On a year-over-year basis, new single family home sales plunged a whopping 28.5% while the monthly supply increased 17.8% to 8.6 months.
These results provide even more evidence that the government's housing tax scam policy was ultimately a complete and total failure accomplishing nothing but creating a temporary distortion of the underlying "organic" housing trends.
With numbers this weak, it could even be argued that the government's tax gimmick ultimately destabilized the nation's home markets by injecting a substantial amount of uncertainty, sponsoring feeble home buyers and preventing the natural market clearing mechanism from playing out.
The following charts show the extent of sales decline (click for full-larger version)
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