Sales of new homes drop during May

According to recent information released by the Census Bureau, sales of new homes dropped 2.1 percent during May, ending the recent upward trend during the last several months.

During May, the annual sales rate of new properties settled at 319,000, which was down from the revised rate of 326,000 during April. Compared to May 2010, however, sales were up 13.5 percent. Furthermore, the rate was well above the 305,000 experts had forecast for the month.

However, after new home sales bottomed out in February, recording only 278,000 transactions, the sector has been one of the weakest performing areas in the economy, CNN reports.

New home sales peaked in July 2005, however, they have been largely unable to recover since the recession took hold of the economy in 2008.

The reduced number of home sales may be proof that potential homebuyers are unable to pay high prices for the properties, and instead, are opting for lower-valued existing homes. Additionally, tighter lending standards have prevented an increased number of homebuyers with poor credit from obtaining loans. Thus, it has become important for potential homeowners to ensure they have clean credit reports. By reviewing their records and looking for problematic or unverified items, consumers may be able to get the quick credit fix they need to become a more attractive mortgage applicant.