A monthly report released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development showed that after the expiration of a federal tax credit, sales of new homes plummeted by 33 percent from April to May. This means that sales of new, single-family homes were at a seasonally adjusted annual rate of 300,000.
This data, combined with the dip in existing home sales reported earlier in the month, seems to confirm that a government tax credit was the main factor supporting home sales and that with its removal, the market is in severe danger of collapsing again.
The news impacted energy stocks heavily, as the housing and construction markets have an impact on many sectors and require large amounts of energy. The decline in oil futures reflects both this and a fear of general economic contraction.
Heating oil and gasoline futures fell as well, but natural gas rose slightly by .46 percent to $4.778 per million BTUs.
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