Sales of new U.S. homes rebounded strongly in June from May's record low, pushing the number of houses on the market to the lowest level in nearly 42 years.
But downward revisions to sales estimates for April and May in Monday's report left in place a picture of a weak housing market and perceptions that economic growth moderated somewhat in the second quarter.
Sales of new single-family homes vaulted 23.6 percent to a 330,000 unit annual rate, the Commerce Department said. Still, the sales pace last month was the second lowest since records started in 1963.
"We can't take too much joy in one month's figure. The roadblocks to a healthy housing market are high, the most important one being the still high jobless rate," said Jennifer Lee, a senihousing market or economist at BMO Capital Markets in Toronto.
The percentage increase last month was the largest since May 1980, and it partially unwound May's historic 36.7 percent drop as the U.S. housing market was roiled by the expiry of a popular tax credit that boosted sales. Analysts polled by Reuters had forecast new home sales rising to a 320,000-unit pace last month from May's previously reported 300,000 units.
New home sales account for only a fraction of the total U.S housing market .
The report, together with package delivery and business services company FedEx Corp's upgrading of its quarterly and full-year earnings forecasts, prompted a rally on Wall Street. .N
Each of the three major U.S. stock indexes gained 1 percent for the day, with the Standard & Poor's 500 .SPX at 1,115.01 -- just a fraction of a point shy of the break-even point for the year. The Dow Jones industrial average . is back in the black for the year. The Nasdaq , which edged back into positive territory for the year on Friday, is now up 1.2 percent for 2010 so far.
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