NEW YORK (CNNMoney) -- Sales of new homes slipped for a second straight month in June, unexpectedly falling 1%, as homebuilders remained reluctant to boost production.
The Census Bureau reported an annual sales rate of 312,000 new homes last month, down slightly from a revised rate of 315,000 homes in May. Compared to new home sales a year ago, June sales were up 1.6%.
Despite the year-over year uptick, the results disappointed. Economists had forecast a sales rate of 320,000 new homes, according to consensus estimates from Briefing.com.
After falling to an all-time low of 278,000 in February, new home sales have been one of the weakest sectors of the economy.
The 312,000 sales rate in June is a far cry from the peak hit in July 2005 of 1.4 million. Ever since the recession took hold in 2008, home builders have been cautious about beginning new projects -- especially with unemployment still painfully high.
The glut of foreclosures on the market has also limited demand for new homes, as financially-strapped consumers look for better bargains.
There were an estimated 164,000 new homes for sale at the end of June. At the current sales rate, it would take 6.3 months to sell through that inventory, the report said.
New home sales in the Northeast declined the most last month, dropping 16%. The only regions to see sales increase were the South and Midwest, which reported increases of 3.4% and 9.5%, respectively.
A separate S&P/Case-Shiller report on home prices Tuesday offered further evidence that the housing market remains crippled.
The report showed that May home prices in 20 major cities dipped 4.5% from a year ago. The average price of new homes sold in June was $269,000, according to the Census Bureau's new home sales report.
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