> July 2009 New Home Sales

New home sales rose to an annualized rate of 433,000 units in July, and sales for the April through June period were revised significantly higher. New home sales have clearly moved off of their cyclical lows, but there remains ample reason to doubt whether this increase in sales can be sustained over coming months, particularly given that the first-time buyer tax credit is set to expire November 30th. There is evidence in the new home sales data that the credit has helped fuel the increase in sales over recent months, as the share of home sales accounted for by homes on which construction has not yet begun has risen sharply since the tax credit has been in place.

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