WASHINGTON — Sales of new homes tumbled for the sixth time in seven months in May while median prices kept plunging, underscoring the depth of the nation's housing woes.

WASHINGTON — Sales of new homes tumbled for the sixth time in seven months in May while median prices kept plunging, underscoring the depth of the nation's housing woes.

The Commerce Department reported Wednesday that new homes were sold at a seasonally adjusted annual rate of 512,000 units in May, down 2.5 percent from the April level.

The median price of a new home sold last month fell to $231,000, down 5.7 percent from a year ago.

The report on new home activity in May followed reports Tuesday that showed record home price drops in April, indicating the nation's housing slump is not only deepening but also widening to include previously untouched parts of the country.

Locally, in figures released earlier this month by the Rogue Valley Association of Realtors, new home median prices dropped by 18.5 percent in May compared with May of 2007. The median price in May was $242,000, while it was $297,000 a year earlier. For March through May, 76 new homes were reported sold, down from 87 sold in the same period in 2007.

Nationally, the inventory of unsold homes rose to 10.9 months in May, meaning it would take that long to exhaust the current supply of unsold homes.

Because of the unusually high inventories, economists believe that home prices will keep falling until the spring of next year.

"Home builders have been doing everything they can to limit the production of new units and move existing inventory, but it hasn't been enough to make a significant dent in the backlog yet," said David Seiders, chief economist at the National Association of Home Builders.

The prolonged problems in housing have dragged down the overall economy, raising the risks of a full-blown recession.

For May, new home sales were down the most in the West, falling by 11.6 percent. Sales dropped 7.9 percent in the Northeast. But sales posted increases in the Midwest of 5.1 percent and were up 0.4 percent in the South.

In other economic news, orders to factories for big-ticket manufactured goods were basically flat in May after declines of 1 percent in April and 0.2 percent in March. Strength in demand for aircraft and computers was offset by widespread weakness in other categories.

Cliff Waldman, an economist with the Manufacturers Alliance/MAPI, said that business plans to buy new equipment continue to be hampered by the troubles besetting the economy, from housing and credit problems to global inflation, reflected in soaring oil prices.

Separately, the Federal Reserve kept a key interest rate unchanged as it wrapped up a two-day meeting on Wednesday, bringing to an end a consecutive string of aggressive rate cuts dating back to last September.

However, economists said they did not expect rate increases to begin for some time, possibly not until March of next year, when the economy should be starting to mount a sustained rebound.

On Thursday, the markets will be looking for the government's revised report on overall economic growth, as measured by the gross domestic product, for the January-March quarter. The expectation is that it will show the GDP expanding at a 1 percent rate in the first quarter, a slight improvement from the 0.9 percent estimate made a month ago.

Wednesday's report on durable goods, items expected to last at least three years, showed that strength in May came from a 10.3 percent jump in demand for commercial aircraft and a 14.9 percent increase in orders for military planes and parts. This helped cushion a 3.3 percent decline in orders for motor vehicles. The auto industry is struggling with slumping sales, reflecting the weak economy and soaring gasoline prices, which have dampened demand for sport utility vehicles and other gas-guzzling vehicles.

Total orders in the transportation sector were up 2.6 percent as the strength in airplanes offset the weakness in autos.

Excluding the volatile transportation sector, orders for durable goods fell 0.9 percent, reflecting weakness in a number of areas outside of transportation. This drop was slightly worse than expected and was the biggest decline for these categories in three months.

Orders for primary metals such as steel dropped by 1.3 percent, while demand for machinery was down 5.3 percent. Demand for computer equipment rose by 10.1 percent, while orders for communication equipment were up by 2.4 percent.

Orders for non-defense capital goods excluding aircraft, considered a good proxy for business investment plans, fell by 0.8 percent in May after having posted a big 3.1 percent rise in April.