Sales of new single-family homes fall

Sales of new single-family homes fell 2.5% last month to an adjusted annual rate of 512,000, according to the Department of Commerce. May home sales declined from April’s revised rate of 525,000 homes sold. Economists surveyed by MarketWatch had estimated that 510,000 new homes were sold last month. New-home sales were down 40.3% compared with May 2007. The median sales price for homes sold last month was $231,000, down 6% from a year earlier. Inventories of unsold homes fell 18% to 453,000 at the end of last month. The inventory represented a 10.9 months’ supply of houses, compared with a 10.7 months’ supply in April. Regionally, sales of new homes fell 11.6% in the West to 114,000 and 7.9% in the Northeast to 35,000. On a positive note, sales rose 5.1% in the Midwest to 82,000 and rose 0.4% in the South to 281,000. “Investors were expecting bad news, and it is essentially what they got,” said Mike Larson, a real estate analyst at Weiss Group LLC in Jupiter, Fla. “It is another testament that housing is struggling, consumer confidence is falling, and unemployment is starting to rise.” A separate report from the Commerce Department showed that demand for U.S.-made durable goods was unchanged last month — a sign that companies are adapting to a slower economy and higher oil prices. Sales of durable goods, which are manufactured goods designed to last at least three years, decreased 1% in April. Sales of non-durable goods increased 3.4% year over year, indicating that capital spending hasn’t collapsed despite a sputtering economy.