Although new home sales jumped by 9.6% in the most recent month and the pace of home sales accelerated to 430,000; the chart below (which doesn't included the latest data point) shows just how far new home sales have declined over the past 3 years. The decline in home sales is the most severe on record and the chart bears the steepness of the decline.
According to most reports, many the new home sales can be attributed to the $8,000 tax credit implemented earlier this year. The program has helped to boost the housing figures since its inception in mid February. What will be interesting is to see in the coming months is what happens to new home sales when the tax credit program ends in November? It is possible the finalization of the program could bring an end to the recent uptick in home sales, which continues to remain underwater compared to last year’s levels. In comparison, rate of sales of new homes in 2008 were approximately 12.5 percent higher on average and median prices that were 10 percent higher at $230,000. (Click on chart for larger image)
