The expiry of the homebuyer tax credit at the end of April has
triggered a double-dip in the housing market, with new home sales falling
particularly sharply in May. Of course, sales were always
going to decline once the tax credit expired, as purchases had been brought
forward from future months. But the drop in other measures of activity has been
even more marked. For example, since the end of April mortgage applications
have plunged by 42% to a 13-year low. That suggests underlying housing
demand is very weak.
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