TREASURIES-Bond prices tumble on Greece optimism, strong U.S. data

* Euro zone officials welcome Greek concessions

* U.S. May existing home sales hit 5-1/2 year high

* Traders await $90 bln in new Treasury supply (Updates prices, adds comments)

By Sam Forgione

NEW YORK, June 22 (Reuters) - U.S. Treasuries prices fell on Monday on optimism Greece would reach a last-minute deal with creditors and after stronger-than-expected U.S. housing data supported expectations of a September Federal Reserve rate hike.

In the euro zone, Greece took a step back from the abyss when it presented new reform proposals that euro zone finance ministers cautiously welcomed as a possible basis for an agreement in the coming days to avert a looming default.

"The market is interpreting EU officials' comments as suggesting that an agreement can be reached," said Kim Rupert, managing director at Action Economics in San Francisco.

U.S. yields also tracked German 10-year Bund yields, which hit their highest level in over a week at 0.895 percent . Yields move inversely to prices.

Both Treasuries and Bunds sold off in tandem since optimism over a Greek deal reduced demand for safe-haven bonds in both Europe and the United States, while a near-term resolution to Greece's debt problems would also give the Fed more leeway to hike rates sooner, analysts said.

The selling of U.S. Treasuries accelerated after the National Association of Realtors said existing home sales increased to the highest in five and a half years, rising 5.1 percent to an annual rate of 5.35 million units. The data was the latest indication that housing and overall economic activity were gathering steam in the second quarter.

"Housing is one of those missing keys to the whole story of the Fed," said Ellis Phifer, market strategist at Raymond James in Memphis, Tennessee. "Just having a little bit more positive news there increases the odds that the Fed would be hiking rates in September."

Traders also awaited this week's $90 billion in new Treasury note supply, which analysts said may have exerted additional pressure on U.S. Treasury prices. Traders typically sell Treasuries ahead of auctions to make room for new supply. The first sale will be of $26 billion in two-year notes on Tuesday.

U.S. 30-year Treasuries prices were last down 1-27/32 to yield 3.15 percent compared with a yield of 3.06 percent late last Friday. Benchmark 10-year note prices were last down 26/32 to yield 2.36 percent, against a yield of 2.27 percent late Friday.

U.S. three-year notes were last down 5/32 in price to yield 1.04 percent, compared with a yield of 1 percent late Friday. (Editing by Bernadette Baum and Chizu Nomiyama)