The tenuous outlook on the housing market didn’t get any better today with the announcement of new home sales for December unexpectedly dropping, indicating that an extended tax credit program has not yet had the impact the industry anticipated.
New home sales declined 7.6 percent for an annual pace of 342,000, the lowest since March, said the Commerce Department today. For all of 2009, sales fell 23 percent to 374,000, the lowest level since records were initiated in 1963.
A government tax credit of $8,000 for first-time buyers was originally due to expire on Nov. 30, but was extended to cover closings through June 30, and expanded to include some current owners.
But the change in the law possibly wasn’t in time to boost December sales. Economists expect the tax credit will help revive home sales throughout the first half of 2010. But there is much uncertainty as to what happens after June 30.
New home sales declined 7.6 percent for an annual pace of 342,000, the lowest since March, said the Commerce Department today. For all of 2009, sales fell 23 percent to 374,000, the lowest level since records were initiated in 1963.
A government tax credit of $8,000 for first-time buyers was originally due to expire on Nov. 30, but was extended to cover closings through June 30, and expanded to include some current owners.
But the change in the law possibly wasn’t in time to boost December sales. Economists expect the tax credit will help revive home sales throughout the first half of 2010. But there is much uncertainty as to what happens after June 30.
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