Business

US home sales dive record 30% as tax break is removed

US housing
Image caption The US housing market has idled without the tax break for home sales

Contracts for sales of previously-owned homes plunged a record 30% in May, far higher than expected.

The figures came in a survey from the National Association of Realtors (NAR).

A tax break, designed to boost sales, was withdrawn at the end of April. A 12% fall in deals had been expected, but the actual decline was more than twice as bad.

The break had galvanised the market, but these figures show it has floundered without it.

The NAR said its Pending Home Sales Index, based on contracts signed in May, not only fell by a record amount, but hit a record low of 77.6, from 110.9 in April.

Pending home sales - deals agreed but not yet completed - had risen by 6% in April.

The fall mirrors the decline in new home sales in May. The Commerce Department recently said that they had slumped by a third compared with the previous month.

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