Sales of new homes dropped in May, surprising analysis who had expected a continued strengthening in US housing market data. According to Bloomberg, transactions fell 0.6% from April, but median prices decreased by just 3.4% from last year. This compares to a much bigger 17% year-over-year decline in existing home prices, as reported yesterday.

Data indicate that prices in the new home market are stabilizing, even as sales remain anemic. This is partly due to the fact that builders, having won reprieves from their lenders and extensions of credit agreements, have been unwilling to further discount prices and offer incentives to buyers. Uncle Sam took care of that, thank you very much, with generous tax rebates to first time buyers of newly constructed homes.

Indeed, upping that figure to $15,000 from $8,000 and doing away with income restrictions is now on the table.

As the government encourages more and more families to jump back into the housing market, it will increasingly seem like a great time to buy. And while some area are showing signs of returning to more healthy market behavior, the vast majority of markets are still trending downward. Opportunities are emerging, to be sure, but only to the savvy and well-informed buyer.

Interested in becoming one of those savvy and well-informed buyers? We are here to help.

Tags: homebuilder, sales, tax credit

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