Sales of newly built, single-family homes declined 2.1% to a seasonally adjusted annual rate of 319,000 units in May, according to figures released by the U.S. Commerce Department on June 23, partially offsetting a larger gain in April.

"The report indicates that new-home sales are holding fairly steady at a relatively low rate, with both April and May sales numbers running above the first-quarter average," noted NAHB Chairman Bob Nielsen.

"In view of the slow progress of economic recovery and the challenges builders continue to face with regard to rising materials prices, access to construction credit, competition from foreclosed homes and inaccurate appraisals, the averages for the last two months combined represent some very slow improvement that should continue as expected economic gains boost consumer confidence," Nielsen said.

"One bright spot in the government's May housing numbers is the inventory of new homes for sale, which continued to fall to a new record low last month," said NAHB Chief Economist David Crowe.

"This means that builders continue to be appropriately cautious about adding new homes to the marketplace,” he said, “and it has pushed down the months' supply to a level typically found in stable markets."

May’s new home sales were down 26.7% in the Northeast and 3.5% in the West. They remained unchanged in the Midwest and rose 2.4% in the South.

Meanwhile, despite the slower sales pace, the inventory of new homes for sale continued downward in May, declining 3.5% to 166,000 units. This marks the lowest inventory number on record and represents a 6.2-month supply at the current sales pace.

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