New home sales fell 2% in May after a 6% increase in April as sales continue to be stuck in a low range.
The U.S. Census Bureau reported Thursday morning that sales of newly constructed homes fell to a seasonally adjusted annual rate of 319,000 in May from a 326,000 rate in April.
May new home sales are off 13.5% from a year ago.
IHS Global Insight economist Patrick Newport said a four-month moving average shows that new home sales are "stuck near the bottom."
He pointed out that the inventory of completed new homes for sale is at a level not seen since 1971 but it still takes 9.2 months for a builder to sell a home. "For builders, the market is still a killer," Newport said.
Meanwhile, IHS Global Insight economists are forecasting that stronger economic growth in the second half of this year will give the housing market a lift.
"We are expecting a better economy (stronger growth, more jobs and lower commodity prices) to lift new home sales to above a 350,000 annual rate in the second half of this year. It will take two to three years, however, for this market to get back to normal," he said.