NAHB Calls for Helpby Tim Manni
New home sales along with home prices have decreased once again in May. Despite an encouraging increase in April, new home sales are down for the sixth time in seven months. In May, new homes were sold at a seasonally adjusted annual rate of 512,000, a 2.5% drop since April. The median price of a new home dropped to $231,000, a decline of 5.7% from a year ago.
Existing inventory of unsold units grew to 10.9 months in May. Economists predict the rising inventory of unsold homes will only cause home prices to drop even further, prompting less and less buyers to enter the market.
The National Association of Home Builders (NAHB) is steadily urging law makers to pass a housing rescue legislation that has been in front of the House and Senate for some time now. The 235,000 members of the NAHB is using a media campaign that has targeted ads in the Washington Post and USA Today which calls upon the policy makers to pass the housing rescue bill that could curb the housing crisis that continues to be one of the biggest threats to our economy.
The bill calls for, among other things, a tax credit for home buyers, a modernization of the Federal Housing Administration, and reform of Fannie and Freddie Mac. The hope is the tax credit will stimulate buyers to enter the market, thus depleting the built up inventory of unsold homes at a faster pace. The goal of the NAHB is to have lawmakers pass the bill prior to their July 4 recess.