WASHINGTON -- A large rebound in June sales of new homes reported yesterday by the Commerce Department reinforced the belief among private analysts that the U.S. economic recovery is on track.

Sales of single-family homes surged 7.4%, to a seasonably adjusted annual rate of 525,000, more than making up for a revised 3.2% decline in May to 489,000, according to the department's Census Bureau. The June pace of sales was the fastest since last August, when the economy began slipping into recession.

"The increase in new home sales in June clearly reflects a continued rally in housing," said John Tuccillo, chief economist of the National Association of Realtors. "In short, housing's back."

But a separate report from the Conference Board indicated that consumers remain cautious about the economy and their own spending plans. The board's consumer confidence index edged down to 77.7 in July, from 78.0 in June, marking the fifth month of little change since a big increase in March. The index is based on a 1985 base reading of 100.

The Commerce Department report showed home sales rebounded in nearly all regions, led by gains on the East and West Coasts, where the recession hit the hardest. Sales in the Northeast shot up 24.5%, to 66,000 from 53,000 in May, marking their best performance since last November. In the West, sales jumped from 15.0%, to 153,000 from 133,000, the highest rate since May 1990.

Sales in the Midwest, where many states escaped the downturn, remained strong as they advanced 2.9%, to 106,000, their best showing in nearly a year and a half. Only the South saw a slight decline as sales slipped 0.5%, to 199,000 from 200,000 in May.

Analysts said upward revisions to the Commerce Department figures for new home sales in March, April, and May suggested residential construction has more strength than many economists believed.

"We expect a moderate increase in housing, at least through the end of the year, as long as we don't get a big jump in mortgage rates," said David Berson, senior economist for the Federal National Mortgage Association. "Further improvements in the labor market, consumer confidence, and income should all lead the housing market to continuing expansion."

The Commerce Department reported Tuesday that personal income advanced 0.5% in June for the fifth consecutive monthly gain, matching a 0.5% increase in personal spending. "It looks as if the consumer is leading us out of this recession," Mr. Berson said. "Consumers are evidently feeling better about the economy and starting to spend."

The Conference Board report said its index for how consumers feel about their current situation rose to 45.2, from 43.7 in June. But expectations for the next six months were down slightly, to 99.3 from 100.9 in June, reflecting declines in how people felt about the job market and business in general.

Buying plans among those surveyed remain soft, with an increase in plans to purchase major appliances but little change in the housing and automobile categories.

The New York-based business research organization said the report was consistent with a feeble economy.

"To date, there have been only faint signs that an economic recovery is in progress," said Fabian Linden, executive director of the board's consumer research center. "Certainly, there are no indications of a vigorous rebound."

Economists expect the Commerce Department's report on the index of leading economic indicators for June that is due out today to be up for the fifth month in a row.

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