ECONOMY

US new-home sales rose 2.2 percent in May; strong buying in the Northeast and West fuel gains

This June 4, 2015 photo, shows a sold sign at a new home development under construction in Nashville, Tenn. The Commerce Department releases new home sales for May on Tuesday, June 23, 2015. (AP Photo/Mark Humphrey)

This June 4, 2015 photo, shows a sold sign at a new home development under construction in Nashville, Tenn. The Commerce Department releases new home sales for May on Tuesday, June 23, 2015. (AP Photo/Mark Humphrey)  (The Associated Press)

Purchases of new U.S. homes surged in the Northeast and West in May, as steady job growth over the past year has lifted the real estate sector.

The Commerce Department says new-home sales rose 2.2 percent last month to a seasonally adjusted annual rate of 546,000, the strongest pace in more than seven years.

Sales of new homes have soared 24 percent year-to-date, helped by the additional incomes from the employers hiring 3.1 million workers in the past 12 months and relatively low mortgage rates.

Last month's gains were concentrated in the Northeast, where sales jumped 87.5 percent. New-home sales increased 13.1 percent in the West, but slipped in the Midwest and South.

The median sales price has fallen slightly, dipping 1 percent over the past 12 months to $282,800.