Sales of new U.S. homes plunged in June, the government said Thursday, a sign that real estate continues to be a weak spot in the economy. The Commerce Department said that new home sales fell 8.1 percent last month to a seasonally adjusted annual rate of 406,000. The report also revised down the May sales rate to 442,000 from 504,000. Buying of new homes fell 20 percent in the Northeast, followed by less extreme declines in the Midwest, South, and West. The modest sales caused the inventory of new homes on the market to increase to 5.8 months, the highest since October 2011. The median sales price was $273,500, up 5.3 percent over the past 12 months. Home sales had been improving through the middle of 2013, only to stumble over the past 12 months due to a mix of rising prices, higher mortgage rates, and meager wage growth. The pressures from mortgage rates have eased since the start of 2014 and the pace of price increases have slowed. Still, other indicators suggest that home-buying has stalled after rebounding from lows reached during the Great Recession.
