The number of housing starts in the US fell by 10 percent in May to an annual rate of 593,000 new units. This is the largest single-month decline since March 2009, missing the target of 659,000 by 66,000 units.
In order to qualify for tax credits, contracts for new construction must have been signed by the end of April and closed by the end of June. The ending of the tax credit will likely lead to fewer new sales for the remainder of the year.
Ã¢â‚¬Å“With the tax credit expiring and sales slowing down, builders will ease up on starts,Ã¢â‚¬Â Michael Moran, chief economist at Daiwa Capital Markets America Inc. in New York, said before the report. Ã¢â‚¬Å“I see the housing market staying neutral for a time, moving sideways rather than being a source of growth.Ã¢â‚¬Â
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