New home sales recovered in June from a record low in May but remained slow. New home sales increased 23.6 percent to a seasonally adjusted annual rate of 330,000 last month, up from a downwardly revised 267,000 in May, the Commerce Department reported Monday. Year-over-year sales fell 16.7 percent.

The June sales pace is the second lowest on record since the Commerce Department started tracking the data in 1963.

Home sales had increased in March and April as homebuyers scrambled to sign contracts ahead of the April 30 deadline for the tax credit. But sales dropped 40 percent in May, the first month after the incentive expired.

The median price of new homes sold in June was $213,400, down 1.4 percent from May and a 0.6 percent decline from June 2009.

Inventory at the end of June was estimated at 210,000 new homes. This was the lowest inventory in nearly 42 years. At current sales pace, it will take 7.6 months to sell through that inventory, down from 9.6 months in May. Considered healthy is a six months of new home inventory.

Regionally, sales improve the most in the Northwest with a 46 percent rise; in the South, sales increased by about a third, while sales in the Midwest rise 21 percent.

Sales in the Midwest, the only region to suffer a decline during the month was the Midwest with almost 7 percent fall.