INSTANT VIEW: New home sales fall in May

NEW YORK (Reuters) - U.S. sales of newly constructed single-family homes fell 2.5 percent in May to a 512,000 annual rate and were down over 40 percent from a year ago, government data on Wednesday showed.

KEY POINTS:

* Economists polled by Reuters were expecting new home sales to slow to a seasonally adjusted 510,000 rate last month from 525,000 in April, revised down from 526,000 previously reported, according to data released by the Commerce Department.

* The inventory of new homes available for sale in May dropped 1.7 percent to 453,000, which was the thirteenth consecutive monthly decline. The May sales pace put the supply of homes available for sale at 10.9 month's worth, the Commerce Department said.

COMMENTS:

RUDY NARVAS, SENIOR ANALYST, 4CAST LTD, NEW YORK:

"I don't think this changes the big picture at all, everything was in line with expectations and you still have a high level of unsold inventory out there. We saw median home prices actually fall this month after being flat the previous month. The trend continues to be down. While we are seeing a slowing in the pace of new home price declines, I think that further declines will be necessary for the market to clear."

THOMAS NYHEIM, PORTFOLIO MANAGER, CHRISTIANA BANK & TRUST CO,

GREENVILLE, DELAWARE:

"It takes seven to ten months to build a home and they want to be in before the winter -- the new-home selling season has slightly passed. It's probably already in the market. You're into the summer months and everything goes slow."

CHRISTOPHER LOW, CHIEF ECONOMIST, FTN FINANCIAL, NEW YORK:

"The decline is keeping new home sales on the same trend of the past two years. It is hard to say anything is improving.