New Home Sales Up in June

New-home sales in U.S. up 11% in June from May

Price cuts and tax credits provide a boost. Still, 2009 is shaping up to be the worst year for new-home sales since at least 1963

Sales of new single family homes in the U.S. rose 11% in June from sales in May. Buyers were responding to price cuts and tax credits meant to help the massive backlog of unsold homes.  Since the jump shares of KB Home rose 54 cents, Lennar Corp. jumped 76 cents, and Pulte Homes Inc. rose an incredible 84 cents. 

The increase was higher than many thought it would be.  However the rut is so deep it will take many additional months of increase to return to "normal."

June sales were the lowest since 1982 and was 21% below that of last year. If the pace holds 2009 will be the worst year for new home sales since they began tracking them in 1963.

The sharpest increase in June-over-May sales was in the Midwest, which posted a 43% gain. New-home sales in the West were up 23% over May.  The Midwest was the only region to sell more new homes in June than in the same month last year, with a 6% gain.