US new home sales fall as Fed mulls interest rates

0 Comments | AFP, June, 2008

WASHINGTON (AFP) — A government survey Wednesday showed sales of new homes tumbled 2.5 percent across the United States in May amid unsettled economic times, as Federal Reserve policymakers deliberated over interest rates.

A monthly Commerce Department report said that new home sales declined to a seasonally adjusted pace of 512,000 homes compared with April.

Most economists had expected sales to fall more sharply to around 510,000 new properties amid one of the deepest and longest-running US housing slumps in decades.

The latest decline came after sales rose an unexpected 4.8 percent in April to a revised 525,000 new homes.

Demand for brand new homes has declined heavily since early 2006 when a multi-year housing bubble abruptly burst.

The...