US new home sales fall in May

| June 23, 2011
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The Commerce Department has today revealed sales of new homes in the US fell, suggesting the housing market remains depressed.

According to the Commerce Department, new single-family home sales fell by 2.1% in May on a monthly basis to an annual rate of 319,000 units, after two consecutive months of gains.

However, despite the fall, new home sales are above levels recorded earlier this year.

Meanwhile, the figures come shortly after the National Association of Realtors (NAR) revealed sales of previously owned homes in the US plunged 15% on an annual basis in May.

The industry body said sales fell by 15% in May to an annual rate of 4.81 million units.

Demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.

Further house price falls are likely this year as high unemployment impacts negatively on the housing market.

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