New Home Sales Lagged in May, So What's Next?

It's official: The housing market stinks. So when's the turnaround coming?

Sales of new homes went into a freefall in May without the government's artificial lifeline. No wonder homebuilders were feeling so glum in June. Analysts were expecting a dip in the housing market, but nothing this bad.

New home sales dropped 32.7 percent from April, the Commerce Department reported, and 18.3 percent from the year before, to a seasonally adjusted rate of 300,000 units. That's the lowest level since the government started tracking home sales in 1963.

Not surprisingly, people are now starting to worry again about the threat of a double dip in the housing market.

Where are things headed now?