Okuma Group: 33% Slump In US New Homes Sales...

Online, July 28, 2010 (Newswire.com) - "Okuma Group", the boutique brokerage, believes that there is little doubt now that any signs of recovery the US real estate market may have exhibited were nothing more than a mirage.

The final nail in the coffin of housing over-optimism came in the form of the worst slump in the sales of new homes in the US since records began in the 1960s.

The Commerce Department data showed that sales of new homes in the US tumbled by a massive 32.7% in the month of May.

Alluding to the expiry of a government tax credit targeted at first-time homebuyers completing their purchases before June 30th, Peter Scott, Senior Vice President at "Okuma Group", said "It's patently obvious to all that the real estate market in the US cannot even mark time let alone recover in the absence of government support".

The market has been the target of more than one stimulus measure. The US Federal Reserve spent more than $1 trillion buying long-dated agency debt from the likes of Freddie Mac and Fannie Mae in an attempt to keep mortgage rates low to entice borrowers but, with many Americans out of work or worried about job security and lenders imposing stricter lending criteria, the market remains heavily dependent upon government stimulus.

"Okuma Group" said the housing data cemented its view that the US economic recovery was looking increasingly unstable and warned clients to sell peripheral stocks into rallies as and when they occur.