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In September, sales for used homes skyrocketed nearly ten percent, thanks to buyers scrambling to purchase their first homes before the $8,000 tax credit ceased. But today, news broke that new home sales had already drooped 3.6 percent in the same month. This drop was the first of its kind since March.
It doesn’t seem to add up. What are new homebuyers more attracted to old brownstones than fresh brick?
A few explanations have arisen:
- “One possibility is that inventory has fallen so low that builders do not have enough completed homes on hand, and are losing sales to the market of existing homes. ” (Patrick Newport, IHS Global Insight)
- “A second possibility is that September’s reading was simply an aberration, just like the August drop in existing home sales was an aberration, and that sales will take off in October. (Patrick Newport, IHS Global Insight)”
- “The data reflect contracts to buy homes, not completed sales. Many new homes are sold while they are still under construction, and buyers may be worried that they won’t be able to complete the deal before the Nov. 30 deadline to take advantage of a tax credit of up to $8,000 for first-time buyers.” (Associated Press)
Image by TheTruthAbout, Flickr Creative Commons