The pace of home sales at California new-home communities struggled through a challenging May after expiration of a federal tax credit, the California Building Industry Association has reported.

The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home developments of 10 units or more were 46 percent below May 2009. During May, 1,745 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 3,200 a year earlier. Sales of single-family homes were down by 45 percent, while sales of town homes and “plexes”—duplexes, triplexes, etc.—were off by 37 percent and sales of condominiums were 55 percent lower than a year ago.

While sales were still down, the base price of units sold was a bit higher than a year ago, and slightly higher than the previous month. Compared with the same period last year, the median base price of homes sold was 5 percent higher than a year ago.

Nonseasonally adjusted total new-home sales were off 21 percent from last month, which is more than historically typical.

Jonathan Dienhart, director of published research for HWMI, said the figures for May were similar to sales trends across the country.

“With the end of the federal tax credit has come a harsh reality check for housing,” said Dienhart. “Similar to what we saw last year with auto sales and the ‘Cash for Clunkers’ program, there is quite a letdown in sales pace after the subsidy ends. Hopefully, like with auto sales, we’ll see some stabilization in new-home purchases in coming months and we can get a better idea of where this market really stands on its own.”

Liz Snow, CBIA’s president and CEO, agreed. Confidence in the state’s economy and employment outlook must improve before a strong recovery in new-home sales can materialize, she said.

“Unemployment is one of the largest factors weighing on the new-home market, as reports show consumers are exercising more caution when it comes to big purchases,” Snow said. “Confidence in job security and the overall eco- nomic recovery must be restored before we see any lasting improvement in new-home sales.”

Builders hope first-time buyer incentives will spur the industry. As of July 13, the Franchise Tax Board has received more than 9,600 applications and reservations for the new-home tax credit.

“We hope this is a sign that will point to some more stable numbers in the coming months,” Snow said.