When the federal tax incentives for new home purchases dried up, so did the sales. They plummeted by 33%:
Sales of new homes collapsed last month, sinking 33 percent 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.
The 33% figure is just the average. According to Market Watch, sales in the West fell by a whopping 50%. That’s not just a contraction; that’s an outright crash. Housing values will fall even further as a result. If home owners think they’re under water now, they haven’t seen anything yet.