Sales of new homes in August rose to the second highest rate on record, the Commerce Department said.

New single-family home sales gained 3.4 percent in August to a seasonally adjusted annual rate of 1.15 million from a downwardly revised 1.11 million July pace, the Commerce Department said.

Many economists had expected homes sales to slow to a 1.12 million unit pace from July's previously reported 1.17 million. Sales in August picked up sharply in the Midwest and Northeast, where gains close to 13 percent were seen, and were up 2.4 percent in the West. However, sales dipped 1.1 percent in the South, the region with the largest volume of sales.

The department said the average sales price for a home dipped to $237,500 in August from $251,800 in July.