Blake Ellis,
Thursday June 23, 2011, 11:19 am EDT

Sales of new homes fell 2.1% in May, after rising for two months in a row, as the housing market continues to struggle.

The Census Bureau reported an annual sales rate of 319,000 new homes last month. That was down from a revised rate of 326,000 in April. But compared to a year ago, sales are up 13.5%.

And the rate in May was better than expected. Economists had forecast a sales rate of 305,000 in May, according to consensus estimates from

After falling to an all-time low of 278,000 in February, new home sales have been one of the weakest sectors of the economy.

Sales peaked in July 2005. But ever since the recession took hold in 2008, home builders have remained reluctant to boost production — especially with unemploymentstill painfully high.

Desperate for a housing rebound

The glut of foreclosures on the market has also sliced demand for new homes, as financially strapped consumers look for better bargains.

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