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WASHINGTON (AP) — 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 said Tuesday that 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. The sharp increase in purchases could help drive more employment in the construction sector and broader economic growth, potentially offsetting the setbacks to growth in the manufacturing sector caused by cheaper oil prices and a stronger dollar that has hurt exports.

Last month’s sales 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.

The increases have caused the supply of new homes to dwindle to 4.5 months, compared to the six months’ supply generally associated with a healthy market.

Still, homebuilders are preparing to meet this demand, having broken ground on more houses this year and plan to continue construction. Approved building permits rose increased 11.8 percent to an annual rate of 1.28 million, the highest level since August 2007, the Commerce Department reported last week.

Existing homes are also seeing strong sales as the economy continues to muscle up.

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