WASHINGTON - Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive a government tax credit.

Wednesday's bleak report from the Commerce Department is the latest sign of a precarious housing market that is struggling to recover and could weaken the broader economic recovery. It follows a disappointing report earlier in the week showing that sales of previously occupied homes had dipped in May.

Analysts linked the sudden drop in new-home sales to the expiration of federal tax credits of up to $8,000. Double-digit unemployment and slow job growth also have weighed on the market, even with mortgage rates at near-historic lows.

"We fear that the appetite to buy a home has disappeared alongside the tax credit," Paul Dales, Capital Economics economist, wrote in a note to clients. "After all, unemployment remains high, job security is low and credit conditions are tight."

New-home sales fell in May from April to a seasonally adjusted annual sales pace of 300,000, the government said Wednesday. That was the slowest sales pace on records dating to 1963. It also was the largest monthly drop on record.

The tax credits expired April 30. Buyers who signed sales contracts by the deadline have until June 30 to close on their homes and qualify.