Demand for new US homes sinks to its lowest level in over 40 years

SALES of new US homes dropped a record 32.7 per cent in May to the lowest level in at least four decades as the boost from a popular tax credit faded, adding to worries over a slowing economic recovery.

Single-family home sales tumbled to a 300,000 unit annual Rate, the lowest level since the series started in 1963, the Commerce Department said yesterday.

The gloomy report suggests the economy’s recovery from the worst downturn since the 1930s might be losing strength. On top of May sales missing market expectations for a 410,000 unit-pace, figures for the prior two months were revised down, implying the impact of the homebuyers’ tax credit was weaker than thought.