June New Home Sales Hit Record

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Sales of new U.S. homes hit a record pace in June, the government said on Friday in a report that defied market expectations the hot housing market would take a breather after sales surged last month.

The Commerce Department (search) said sales of new single-family homes rose 4.7 percent to a record 1.160 million annual rate, surprising Wall Street analysts who had expected sales to slip to a 1.120 million rate.

June's unexpected gain followed a revised 10.9 percent jump in May to a 1.108 million annual pace.

Buoyed by low mortgage rates, the red-hot housing sector has provided a key pillar of support for the U.S. economy as it struggles to recover from the 2001 recession.

The increase in sales in June left the inventory of new homes on the market at only 3.6 months' worth, the lowest since November 1998.