US new-home sales fell 7.8% in May

US new-home sales fell 7.8% in May
In this June 13, 2019, photo a new home is under construction in Mechanicsville, Va. On Tuesday, June 25, The Commerce Department reports on sales of new homes in May. (AP Photo/Steve Helber)

WASHINGTON (AP) — Sales of new U.S. homes slumped 7.8% in May, as sales plunged in the pricier Northeastern and Western markets.

The Commerce Department says that new homes sold at a seasonally adjusted annual rate of 626,000 in May, down from 679,000 in April. During the first five months of the year, purchases of new homes have fallen 3.7% compared to the same period in 2018.

Lower mortgage rates and a healthy job market have yet to unleash more home-buying. Sales of new homes plummeted 35.9% in the West and 17.6% in the Northeast. New-home sales rose 4.9% in the South and 6.3% in the Midwest, which are generally more affordable markets.

The median sales price of a new home fell 2.7% from a year ago to 08,000.