WASHINGTON (Reuters) - Sales of new U.S. single-family homes dropped to a six-month low in May as a jump in mortgage rates weighed on demand, offering more evidence that the housing market recovery was faltering.

New home sales declined 11.3% to a seasonally adjusted annual rate of 619,000 units last month, the lowest level since November, the Commerce Department's Census Bureau said on Wednesday. The sales pace for April was revised higher to 698,000 units from a previously reported 634,000 units.

Economists polled by Reuters had forecast new home sales, which account for more than 10% of U.S. home sales, edging to a rate of 640,000 units.

New home sales are counted at the signing of a contract, making them a leading indicator of the housing market. They, however, can be volatile on a month-to-month basis. Sales slumped 16.5% on a year-on-year basis in May.

The housing market has hit a soft patch, with the resurgence in mortgage rates also undercutting previously owned home sales and home building. Residential investment posted double-digit growth in the first quarter.

The average rate on the popular 30-year fixed mortgage hit a six-month high of 7.22% in early May before retreating to 7.03% by the end of the month, data from mortgage finance agency Freddie Mac showed.

Sales plunged 43.8% in the Northeast and slipped 4.5% in the West. They plummeted 12.0% in the densely populated South and decreased 8.6% in the Midwest, which is viewed as a more affordable region.

The median new house price fell 0.9% to $417,400 in May from a year ago. Nearly half of the new homes sold last month were priced under $399,000.

A survey from the National Association of Homebuilders last week showed the share of builders cutting prices to bolster sales in June was the highest in five months. Builders are constructing smaller homes to try and fit homebuyers' budgets.

National house prices are, however, rising. The Federal Housing Finance Agency reported on Tuesday that single-family home prices increased 6.3% year-on-year in April.

There were 481,000 new homes on the market at the end of May, up from 474,000 units in April, the Census report showed.

At May's sales pace it would take 9.3 months to clear the supply of houses on the market, up from 8.1 months in April.