U.S. new home sales jump from record low

Sales of new homes surged last month, but it was the second-weakest month on record, the Commerce Department says. The lackluster economy has made potential buyers skittish about shopping for homes. New home sales rose nearly 24% in June from a month earlier to a seasonally adjusted annual sales pace of 330,000. May’s number was revised downward to a rate of 267,000, the slowest pace on records dating back to 1963. Sales for April and March were also revised downward. The housing market had boomed earlier in the year on the strength of federal tax credits. Since they have expired, the number of people looking to buy has dropped, notwithstanding the lowest mortgage rates in decades. Despite the month’s increase, sales are still down 72% from their peak annual rate of 1.39 million in July 2005. New home sales made up about 7% of the housing market last year. That’s down from about 15% before the bust. Weak sales mean fewer jobs in the construction industry, which normally powers economic recoveries.