NEW YORK (CNNMoney.com, June 26, 2006) -- The pace of new home sales showed an unexpected increase in May, as the latest reading of the real estate market's strength bucked rising mortgage rates and other signs of a cooling housing market
New homes sold at an annual pace of 1.23 million homes in the month, up 4.6 percent from the revised 1.18 million annual sales pace in April. Economists surveyed by Briefing.com had forecast that sales would slow to a 1.15 million rate in May.
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The report showed a decline in new home prices in May when compared to April, though price measures were still above year-earlier price levels.
The median new home price fell 4.3 percent from April to $235,300, although that is still up 3.1 percent from May 2005. Median reflects the point at which half the homes sell for more and half sell for less.
The average home price slipped 2.6 percent to $294,300, the first time it has been below the $300,000 mark since December. It is still up 2.4 percent year-over-year.
Most housing readings this year have been showing signs of a slowing real estate market, as mortgage rates rise and prices soften from record highs.
Builders' confidence has fallen to its lowest level since April 1995, according to the latest member survey by the National Association of Home Builders (NAHB). The pace of permits issued for new homes fell in May to the lowest level seen since 2003, according to a separate Census Bureau report.
But the May new home sales report showed the strongest pace of sales since December, with the South - the region that accounts for about half of new home sales - seeing its best sales rate since October.