New Home Sales Remain Strong, Rising 2.1% in May

.S. new home sales rise the highest level in seven months, rising 2.1%, the Commerce Department reported Friday.

The gain, to an annual rate of 1.298 million homes, followed a 1.271 rate in April that was less than the 1.316 million rate that had been originally reported as a record.

May's sales rate was the second-fastest on record.

The National Association of Realtors said 2005 would be a record year for sales of both new and existing homes.

Sales rose in two of four geographic regions. They surged 22.9% in the Midwest and rose 1.7% in the West, while declining 0.8% in the South and plunged 24.5% in the Northeast.

ew home sales account for 15% of U.S. residential real estate sales.