New home join the existing home sales double dip brigade, and plunge by an unprecedented 32.7%, nearly double the expected -18.7, compared to a previous reading of 14.7%. The government succeeded in making a mockery of this data series with all its ridiculous stimuli, and now we are officially in a housing double dip absent another massive stimulus bill. The median sales price of new houses sold in May 2010 was $200,900, lowest since December 2003, and a 9.6% drop YoY. Full report here.
Oh, and stocks plunge on the news now that there is no doubt which way the Head And Shoulders-shaped recovery is headed. The only reason the market is not down 10% at this point is because the Fed will imminently announce negative interest rates, as it continues to exhume the grave of JM Keynes.
Here is what the official entrance into a double dip looks like:
Even Goldman can't spin this abysmal result:
BOTTOM LINE: Home sales fall sharply in May to a new, all-time low following expiration of tax credit deadline. Prior figures revised down significantly. Report underscores challenges to builders posed by large overhang of unoccupied existing homes.
New home sales -6 (2, -3).
New home sales -32.7% in May (mom, -18.3% yoy) vs. GS -25%, median forecast -18.7%.
1. Sales of new homes plummeted in May to a new all-time low of 300,000 (annual rate) following the April 30 deadline for contracts to be signed to qualify for the homebuyer tax credit. 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).
2. In all likelihood, sales will rise a bit in coming months, as the 300,000 figure reflects some acceleration of sales into previous months to get the tax credit. That said, the persistence of sales at such low levels (and the magnitude of the revisions) underscores the challenges facing homebuilders, whose projects must compete with a large overhang of unoccupied existing homes.