New U.S. home sales fell slightly in May, which comes as another sign that the housing market's recovery is likely to be gradual and prolonged, according to a Commerce Department report released on Wednesday. The Commerce Department said that sales dropped 0.6 percent in May to a seasonally adjusted annual rate of 342,000, from a downwardly revised April rate of 344,000. Sales were down nearly 33 percent from May last year. The results fell far short of economists' forecast of a 360,000 sales pace, according to Thomson Reuters. However, many analysts think new home sales hit bottom in January and will increase gradually as the economy gathers steam. The average sales price of $221,600 was up 4.2 percent from April, but down 3.4 percent from a year ago. Still, houses are still sitting on the market unsold for months. There were 292,000 new homes for sale at the end of May, down more than 2 percent from April.
