WASHINGTON (AP) — Sales of new U.S. homes plunged in June, a sign that real estate continues to be a weak spot in the economy.

The Commerce Department says new home sales fell 8.1 percent last month to a seasonally adjusted annual rate of 406,000. The report also revised down the May sales rate to 442,000 from 504,000.

Buying of new homes fell 20 percent in the Northeast, followed by less extreme declines in the Midwest, South and West. The modest sales caused the inventory of new homes on the market to increase to 5.8 months, the highest since October 2011.

Home sales had been improving through the middle of 2013, only to stumble over the past 12 months due to a mix of rising prices, higher interest rates and meager wage growth.