More woes for US housing market

The Commerce Department has today revealed a rise in sales of new homes in the US for the month of June.

However, the rate of sales was the second slowest since records began in 1963.

According to the Commerce Department, new single-family home sales rose to an annual rate of 330,000 units from a revised 267,000 in May – the second lowest on record.

The US housing market has been suffering since a Government tax incentive expired at the end of April.

The end of the Government’s tax credit initiative, which provided up to $8,000 for new buyers and $6,500 for current owners who buy and move into another home, has boosted the housing market over the last few months.

However, as the effect of the tax credit continues to fade over the next few months, sales and activity are expected to dwindle.

In related news, last week, the National Association of Realtors (NAR) revealed a further fall in sales of previously owned homes in the US for the month of June – the second consecutive monthly fall.

The NAR said sales fell 5% in June to an annual rate of 5.37 million units.

Higher unemployment and tight credit are preventing people from buying homes, according to analysts.

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