UPDDATE 1-U.S. new home sales fell 6.6 percent in June

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By Patrick Rucker

WASHINGTON, July 26 (Reuters) - Sales of new U.S. homes fell 6.6 percent in June to a lower-than-expected level and prices slumped from May, according to a government report on Thursday that pointed to ongoing weakness in the housing sector.

New single-family home sales fell to an annual rate of 834,000 from a revised rate of 893,000 in May, the Commerce Department said.

Analysts polled by Reuters were expecting June sales to fall to an 895,000 unit pace from a previously reported rate of 915,000 units in May.

In June, the median sales price of a new home fell 1.3 percent to $237,900 from $241,000 in May.

There were 537,000 new homes for sale in June, holding the same level reported in May. It would take 7.8 months to clear that inventory at the current sales pace, up from the 7.4 months reported in May.

U.S. Treasuries extended gains after the weaker-than-expected housing data, while stocks fell further and the dollar declined.

Thursday's data came a day after another key report showed the pace of existing home sales fell to a four-and-a-half-year low. Home resales represent 85 percent of the housing market.