Sales of New Homes Hit Record Low

Washington, DC, June 23, 2010--Sales of new single-family houses fell a record 33% in May to a record-low, according to the Commerce Department.

Sales dropped to a seasonally adjusted annual rate of 300,000, the lowest since records begin in 1963. April's sales pace was revised down to 446,000 compared with 504,000 originally reported. March's sales were also revised lower.

The results were much worse than expected, and economists had expected a  20% decline to a seasonally adjusted annual rate of 405,000.

Sales fell sharply in all four regions, with sales down more than 50% in the West.

The median sales price in May was $200,900, down 9.6% from a year earlier and the lowest since December 2003.

Home builders continued to shed inventories in May, cutting the number of unsold homes by 0.5% to 213,000, the lowest level in 39 years. In the past year, inventories are down 27%, while sales are down 18%.

Home builders are facing stiff competition from a glut of inventory of existing homes, fueled by pent-up demand to move and by high levels of foreclosures and short sales.