WASHINGTON, June 26: Sales of new US homes jumped 4.6 per cent in May to an annualised rate of 1.234 million units, the Commerce Department said on Monday, outpacing expectations and signalling strength in the housing sector.

Private economists had predicted new sales would come to 1.145 million in the month.

The department issued a downward revision for the April figures, to show new home sales of 1.180 million rather than 1.198 million as initially reported.

And compared to May 2005, new home sales were down 5.9 per cent.

Other housing market indicators are pointing to a softer market as rising interest rates curb demand. Some analysts are calling for a bursting of what they see as a property bubble.

The median price of a new US home fell 1.3 per cent from April to $235,300.

The report also showed the inventory of unsold new homes on the market fell 1.6 per cent to 556,000, representing a 5.5-month supply at the May sales pace. —AFP