New Home Sales Unexpectedly Drop to Seven-Month Low in June

New U.S. single-family home sales fell in June to their lowest level in seven months and May's sales were revised sharply lower, in what appeared to be a minor setback for the housing market recovery.

The Commerce Department said on Friday sales declined 6.8 percent to a seasonally adjusted annual rate of 482,000 units, the lowest level since last November.

May's sales pace was revised down to 517,000 units from the previously reported 546,000 units. Economists polled by Reuters had forecast new home sales, which account for 8.1 percent of the market, to be unchanged last month.

Sales were up 18.1 percent compared to June of last year. Despite two straight months of declines in new home sales, the overall housing market recovery remains intact.

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A report on Wednesday showed home resales jumped to a more than eight-year high in June. Data last week showed building permits near an eight-year peak in June and housing starts increasing solidly.

New homes sales increased 28 percent in the Northeast after soaring 78.6 percent in May. Sales fell 17 percent in the West and were down 11.1 percent in the Midwest. In the South, sales slipped 4.1 percent.

The stock of new houses for sale increased 3.4 percent to 215,000 last month, the highest since May 2010. Supply remains less than half of what it was at the height of the housing boom.

At June's sales pace it would take 5.4 months to clear the supply of houses on the market, the most since last November. That was up from 4.8 months in May. The median price of a new home fell 1.8 percent from a year ago to $281,800. (Reporting by Lucia Mutikani; Editing by Paul Simao)