New home sales, consumer confidence fall

By Patrick Rucker

WASHINGTON (Reuters) - U.S. new home sales fell in May while consumer confidence hit a 10-month low in June on worries about jobs and the business climate, adding to signs of sluggish economic growth.

"These are numbers that are consistent with a slowing down in activity, a moderation on the consumption side," said Steven Wieting, an economist with Citigroup Global Markets in New York.

Sales of new U.S. homes fell 1.6 percent last month to an annual rate of 915,000 units from a downwardly revised pace of 930,000 in April, the Commerce Department said on Tuesday. Analysts had been looking for May new home sales of 925,000.

While sales fell, prices rose. The median sales price of a new home climbed 1.5 percent in May to $236,100 from $232,700 in April. That marked a reversal from April, when prices took a big tumble but sales rose strongly.

However, adding to the gloomy picture for housing, a separate report released on Tuesday showed existing U.S. single-family home prices declined in April, extending a string of negative year-on-year decreases that started in January.

As woes deepened for the housing sector, the second-largest U.S. home builder, Lennar Corp. (LEN.N: Quote, Profile, Research, Stock Buzz), posted a quarterly loss, forecast a loss for the current quarter, and warned the housing market could tumble further.

The drag the struggling housing market has created for the broader economy looks set to persist, analysts said.

"Housing's contribution to (economic) growth will be negative in both the second quarter and the third quarter," said Steven Wood, chief economist at Insight Economics in Danville, California.