While yesterday's May Existing Home Sales report showed a small 2% decline from April, it was nothing like the shocking 33% drop in the May New Home Sales report released today. There's an important difference in how the two reports are measured, though, which was a major factor due to the end of the home buyer tax credit on April 30. Also worth noting is that New Home Sales represent about 10% of total sales versus 90% for Existing Home Sales, so the New Home Sales data is typically more volatile simply because it is a smaller data pool. Existing Home Sales are reported by the National Association of Realtors (NAR) and represent transaction closings. New Home Sales are a government report issued by the U.S. Department of Commerce and are based on contract signings. Usually this is not a significant distinction, but the qualifications for the home buyer tax credit affected each report to a very different degree in May. To qualify for the tax credit, a home buyer had to sign a contract by April 30 and close by June 30 (although the "close-by" deadline may be extended by Congress). The tax credit pulled forward sales that otherwise [...]