New home sales jumped 12.4% in July to a seasonally adjusted annual rate of 654,000 in July, according to the Census Bureau.
It was the strongest print since October 2007.
Economists had forecast that sales of new single-family houses fell 2% at a seasonally adjusted annual rate of 580,000, according to Bloomberg.
But the jump in sales was really about one region: the south, where sales have surged at a much faster rate than everywhere else this year. New home sales rose at a rate of 398,000 there.
New home sales data are among the volatile monthly numbers on the housing market, and are subject to revision.
Last month's data for June sales, revised lower, showed a 1.7% rise at a seasonally adjusted annual rate of 582,000.
SEE ALSO: MORGAN STANLEY: This corner of the real-estate market is about to peak
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