WASHINGTON -- Sales of new single-family houses surged 6.7 percent to an annual rate of 1.017 million last month, surpassing the 976,000 rate projected by private economists. July was the first time new home sales passed the one-million mark.

Regionally, the Midwest led July's housing strength, with home sales there up 16 percent. Home sales jumped 10.1 percent in the South, but they plummeted 9.1 percent in the Northeast and eased 0.4 percent in the West.

Inventories of new homes hit a more than five-year high of 330,000 in July, up from 327,000 in June. But consumers are snapping up the homes at an even faster pace than they are being placed on the market.

In July, the supply of new homes fell to 3.9 months worth from 4.2 months in June.