A historic drop in new-home sales following the expiration of the federal homebuyer tax credit just might lead to yet another tax credit, a pair of analysts told SNL on June 23.

New-home sales tumbled 32.7% month-over-month in May, hitting a seasonally adjusted annual rate of sales at 300,000, a record low for the series that dates back to January 1963. The previous low was 338,000, set in September 1981.

The drop was also the largest month-over-month decline on record. Previously, the largest month-to-month decline was a 23.8% decline in January 1994. The U.S. Census Bureau and Department of Housing and Urban Development will likely revise May's numbers when they release results for June; the margin of error for new-home sales in May was 9.9%.

The cliff dive shattered expectations. Cristian de Ritis, a director at Moody's Economy.com, told SNL that the consensus estimate was for a pace of 420,000, with Moody's Economy.com projecting a rate of 425,000. He expected the tax credit to pique buyer interest in a manner that would carry over for months following the credit's expiration.

"In effect, I think what we've done is pull ahead a lot of sales," de Ritis said. "And we're just realizing now that we've pulled ahead many more of the sales than we had anticipated."

Still, the number is so bad that it makes a decent case for an extension and retuning of the tax credit, de Ritis said.

Michael Widner, an analyst with Stifel Nicolaus & Co., told SNL that the tax credit did nothing to help housing fundamentals and only pulled demand forward. In a June 22 report, Widner predicted the new-home sales rate would hit 295,000 in May, just 5,000 units off the actual pace.

"The tax credits just add noise. The tax credits don't create more households, they don't create more people, they don't create more families," Widner said. "They just give people incentives to buy houses sooner rather than later. And at the end of the day, there's no substitute [for fundamentals]. It's a long, slow trudge through 10 years of overbuilding."

Widner said he expects new-home sales to return at a pace of 350,000 to 360,000 until the oversupply is handled. In fact, the market has been steadily bouncing along that bottom, he said, once one strips out the effect of the tax credit.

Even though he is not in favor of another tax credit, Widner said May's exceptionally low number means plenty of industry insiders will push for one.

"On the one hand, I know that the phones are ringing off the hook in D.C. right now for people clamoring for a new tax credit," Widner said. "So the shock value of an all-time low is going to be a lot of people saying: 'Oh my God, we gotta do more to stimulate housing.' ... And on the other hand, you're going to get people, who frankly I side with more, saying: 'You know, look, obviously the tax credit did nothing but pull demand forward, and in the wake of the tax credit you see the void left behind.'"

Indeed, de Ritis falls into the first group, saying that the May number "suggests that maybe more stimulus is needed, that the market really isn't ready to stand on its own without support from the government."

He said another credit might have the effect of simply "kicking the can down the road," but noted that a new tax credit could be more targeted so it only applies to buyers truly on the fence.