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 photo credit: wagneriteam
Our country hasnt seen a drop in new home sales like this in 40 years. Down a whooping 32.7% in May, the tax credit expiration put a holt on home sales. Single family home sales dropped lower than weve seen since 1963. The tax credit, designed to create a temporary boost in purchasing and a perception that the economy is on the mend, has now ended and has actually created a larger than normal drop in purchasing.
The economy was under the temporary impression the government and the tax incentive would fix the nations financial problems, and now the false sense of security has been removed creating more feelings of insecurity and panic over our failing economy, which is reflected in consumers purchasing behavior. April and Marchs sales numbers were corrected to reveal a further drop than expected, eliminating the gains made in the prior two months.
The race was on to get under contract by April 30th to qualify for the tax credit; otherwise you missed the governments incentive. There is a push, however, to extend the credit, but now that its over, home buyers have stopped buying. Considering the revised stats, the big boost we received from the tax credit wasnt the boost we hoped it was.
A normally self correcting system was interfered with by the government and has now started to show the results of the tampering. A 1.6 % drop in the S&P home builders ETF and U.S. stock fell after the release of the new home sales information, also major indexes turned negative as well. We need to see a realistic view of the economy and respond accordingly. With the artificial ups and downs its hard to get a sense of where things will go and how to fix the issues.
Read more from CNBC
Posted on June 24, 2010 13:17:15 by  IPTV.Boyz
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