Sales of new U.S. homes rose in May at the fastest pace in more than two years, the government reported Monday, suggesting that a modest recovery in the battered housing market continues despite weaker job growth. The Commerce Department said sales of new homes increased 7.6 percent last month to an annual rate of 369,000 homes, the fastest pace since April 2010. Despite the gains, however, the sales pace is less than half the 700,000 rate economists consider to be healthy. The May increase in new-home sales follows other signals that indicate the housing market is beginning to rebound almost five years after the market collapsed. Builders are showing more confidence in the market and starting more new homes, mortgage rates have plummeted to the lowest levels on record, and sales of previously owned homes are up sharply from a year ago. Sales of new homes are rising despite a weak job market, which has slowed retail spending and business investment in computers and machinery. Some economies warn that the weaker job market also has begun to affect some home sales.
