New-home sales slide as home buyer demand remains slow in June. This is the fifth in six months.

According to the data released by the U.S. Commerce Department , sales of new single-family homes slipped 6.6% in June. This is due to a seasonally adjusted annual rate of 834,000 units as home buyer demand continued to weaken, The June sales pace was 22.3% slower than last year’s and down by 40% compared to the values in mid-2005 which is considered as the housing market was at its best.

“The ongoing contraction in home sales is consistent with NAHB’s surveys of single-family builders. Our Housing Market Index now is down to the lowest level since January 2001, when the national economy was in recession,” said Brian Catalde, president of the National Association of Home Builders (NAHB).

“A significant increase in prime mortgage interest rates, along with the tightening of mortgage standards in subprime and other components of housing finance, clearly weighed on home buying in June,” said NAHB Chief Economist David Seiders. “Home builders continue to trim prices and offer large nonprice sales incentives, but many prospective home buyers obviously are reluctant to sign on the bottom line.”

“We still expect to see signs of stabilization later this year, although downside risks appear to be mounting,” added Seiders.

The inventory of new homes for sale was 537,000 in June, equaling the May inventory figures. With the sales pace last June, the housing backlog was up to 7.8 months up from 7.4 months in May.

Units still under construction represented almost 51% of the inventory while completed homes for sale were 33% of the inventory. Units-for-sale that were not yet started but permitted represented 16% of the inventory level. No change was observed from last month. The average length of time that completed homes were on the market was 6.0 months in June. This is longer than what was observed in May which is 5.7 months.

Although new-home sales in June were up 7.6% in the South, sales were down by 27.1% in the Northeast, 17.1% in the Midwest and 22.5% in the West causing the national figures to decline.