New US single-family home sales fell in June to a seven-month low and May's sales were revised sharply down, but the data did little to change the belief that the housing market recovery was gaining momentum. Sales of new homes account for only 8.1 per cent of the housing market and tend to be volatile on a month-to-month basis. June's surprise decline and the May revisions also are at odds with other housing data that have shown strong momentum. "We should not get too worried about the signal from the new home sales data at this point," said Daniel Silver, an economist at JP Morgan in New York. New home sales dropped 6.8 per cent to a seasonally adjusted annual rate of 482,000 units, the lowest level since last November, the Department of Commerce said. May's sales pace was cut to 517,000 units from the previously reported 546,000 units. Despite two consecutive months of declines in new home sales, the housing market recovery remains intact. New home sales were up 18.1 per cent compared to June last year. Housing is being supported by a tightening labour market, which has unleashed demand from young adults. Government efforts to ease lending conditions for first-time buyers through mortgage finance firms Fannie Mae and Freddie Mac also have helped. A report on July 22 showed home resales jumped to a more than eight-year high in June. Data the previous week showed building permits near an eight-year peak in June and housing starts increasing solidly. "We see no reason to change our view that housing activity is on an upswing," said John Ryding, the chief economist at RDQ Economics in New York. The strong housing momentum suggests the economy remained on solid ground despite a surprise drop in retail sales last month and a struggling manufacturing sector, and should be able to absorb an interest rate rise expected later this year. The US economy is in better shape than its global peers. Data on Friday showed Chinese manufacturing contracted in July to a 15-month low and business activity in the euro zone slowed. US manufacturing, which has been hobbled by a strong dollar and spending cuts by energy companies, showed signs of stabilising in July.