Tax Credits Gone, New Home Sales Plunge 33%

Sales of new homes collapsed last month, sinking 33% to the lowest level on record as potential buyers stopped shopping for homes once they could no longer get government incentives. The Commerce Department says new home sales fell in May from a month earlier to a seasonally adjusted annual sales pace of 300,000. That was the slowest sales pace on records dating back to 1963.

It indicates that buyers left the market as federal tax credits of up to $8,000 expired April 30. Economists surveyed by Thomson Reuters had expected a May sales pace of 410,000. April's sales pace was revised downward to 446,000.