The Commerce Department on Wednesday is expected to say new-home sales dropped 20% last month, according to economists surveyed by Dow Jones, to an annualized 400,000 units.
That would largely unwind sharp gains recorded in March and April ahead of the contract deadline. Already last week, Commerce said new home construction dropped by 10% last month.
It is far from clear this marks the start of a “double-dip” for the housing market. The hardest-hit segment—new home sales—is a small part of the market, accounting for just 8% of homes sold in April even with the tax credit’s lift.