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US new home sales fall to seven-month low

Sales fell 6.8 per cent to a 482,000 annualized pace, the weakest since November.

[WASHINGTON] New US single-family home sales fell in June to their lowest level in seven months and May's sales were revised sharply lower, in what appeared to be a minor setback for the housing market recovery.

The Commerce Department said on Friday sales declined 6.8 per cent to a seasonally adjusted annual rate of 482,000 units, the lowest level since last November.

May's sales pace was revised down to 517,000 units from the previously reported 546,000 units. Economists polled by Reuters had forecast new home sales, which account for 8.1 per cent of the market, to be unchanged last month.

Sales were up 18.1 per cent compared to June of last year. Despite two straight months of declines in new home sales, the overall housing market recovery remains intact.

A report on Wednesday showed home resales jumped to a more than eight-year high in June. Data last week showed building permits near an eight-year peak in June and housing starts increasing solidly.

New homes sales increased 28 per cent in the Northeast after soaring 78.6 per cent in May. Sales fell 17 per cent in the West and were down 11.1 per cent in the Midwest. In the South, sales slipped 4.1 per cent.

The stock of new houses for sale increased 3.4 per cent to 215,000 last month, the highest since May 2010. Supply remains less than half of what it was at the height of the housing boom.

At June's sales pace it would take 5.4 months to clear the supply of houses on the market, the most since last November. That was up from 4.8 months in May. The median price of a new home fell 1.8 per cent from a year ago to $281,800.