Northeast home sale slump drives U.S. figure down

A smaller turnout by home buyers in the Northeast was the main reason national sales of previously occupied homes fell in May.

Sales of previously occupied homes dipped 2.2 percent in May from April, the National Association of Realtors said Tuesday, even though buyers could receive government tax credits. And nearly a third of sales in May were from foreclosures or other distressed properties.

But excluding an 18.3 percent decline in the Northeast, sales actually rose 1.5 percent. The three remaining regions posted flat or improved sales for the month.

Agents love to say that real estate is local. But such a large variation in regional numbers is unusual. This month's anomaly is one of the largest regional differences ever recorded in NAR's data, the trade group said.

Economists say government incentives, which expired on April 30, are creating bizarre data and should be discounted.

"I would make absolutely nothing of it," said Dean Baker, co-director of the Center for Economic and Policy Research, a liberal Washington think tank. "The Northeast is also the smallest region, so it's subject to more randomness."

Home buyers had until April 30 to qualify for tax credits of up to $8,000. Buyers who signed sales contracts by the deadline have until June 30 to close on their homes and still receive the credit. There is a movement in Congress to extend the closing deadline until Sept. 30 to give buyers who signed contracts by the April deadline enough time to complete their purchases.

Lawrence Yun, the Realtors chief economist, said delays in the mortgage-lending process put about 180,000 potential buyers in limbo.- AP