New single-family home sales resumed their decline in May, down 2.5% to an annual pace of 512,000, wiping out roughly half the gain made during a unexpectedly strong performance in April, the Commerce Department reported Wednesday.

On a year-over-year basis, new home sales are down 40.3% from May 2007 and 53% below May 2006. Months supply, which had fallen to a revised 10.7 in April from 11.4 in March, was back up to 10.9 in May, and prices resumed their decline, with the median falling 6.1% to $231,00 from $246,100 in April and the average falling 3% to $311,300.

Regionally, sales were up 5.1% from April in the Midwest, but down 42.3% from May, 2007, and up marginally, 0.4%, in the South, which still was off 35% from last year. The West was off 11.6% in May, which put it down 43% year-over year, and the Northeast was down 7.9% month-to-month and 57.8% year-over-year.

The Commerce Department put the number of new homes on the market at the end of May at 453,000, down from a revised 461,000 in April and 471,000 in March.