New-Home Sales Decline 1.6%

After a 12.5% jump in new-homes sales in April, sales fell by only 1.6% in May, according to the government's latest report, indicating that sales may be stabilizing at a new level.Lynn Reaser, an economist at Bank of America, Boston, said sales may have hit their low point in the first quarter. "Perhaps the worst is behind us," she said. But she added that builders still face "difficult months ahead" until they get their inventories of unsold homes under control. The U.S. Census Bureau reported that sales of new single-family homes fell from a seasonally adjusted annual rate of 930,000 in April to 915,000 in May. April sales were revised downward by 51,000 units. Nevertheless, the revised number for April shows that sales surged by 103,000 units, or 12.5%, from the level recorded in March.