• Ending of state tax credit is blamed
• ‘Activity stopped as quickly as it started’
California homebuilders pulled back on new-home production in July as homebuyers retreated from housing markets around the state following the discontinuation of the successful homebuyer tax credit early in the month, the California Building Industry Association says.
“Our homebuilders reported a significant drop in traffic last month, largely due to the state closing the window on the homebuyer tax credit,” says Robert Rivinius, CBIA’s president and CEO.
The Franchise Tax Board stopped taking applications for the $10,000 new-home credit at the beginning of July because the amount allocated for the program had run out.
“Activity stopped as quickly as it started, which is bad news for housing and the broader economy,” says Mr. Rivinius.
According to statistics compiled by the Construction Industry Research Board, homebuilders pulled permits for 3,011 total housing units in July, down 14 percent from June. Permits for single-family homes totaled 2,045, down 29 percent from June when builders pulled permits for 2,864 units, the highest monthly tally since July of last year.
CIRB also announced that it is revising its forecast downward from 40,000 total units to just 39,500 total units in 2009, which would be by far the lowest total on record.
