Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits.
The tax credit caused a temporary bubble in housing prices, during which buyers paid too much for real estate. Recent buyers must now ask themselves if the tax savings outweighed the amount of their overpayment in price.
The price drops were broken down by region. AP reported a 33% drop in the Northeast from April's levels.
Click here for my thoughts on the real estate tax credit in October 2009.