WASHINGTON (AP) — U.S. sales of newly built homes increased 1.3% in November from the prior month, a sign that low mortgage rates are pushing up purchases as well as prices.

The Commerce Department said Monday that new single-family houses sold at a seasonally adjusted annual rate of 719,000 last month. Sales surged in the Northeast and West, but they were flat in the Midwest and fell in the South.

New-home sales have increased 9.8% so far this year. The increase largely reflects a steady decline in mortgage rates, which has made borrowing cheaper and brought more people seeking to upgrade their house into the market.

Still, prices have moved upward as a result of construction lagging demand. The median new-home sales price was $330,800, up 7.3% from a year ago.

Demand has been stoked by a steady decline in mortgage rates over the past 12 months. The typical 30-year mortgage rate has fallen from roughly 4.9% a year ago to 3.8% this November. This decline in mortgage rates reflected the broader global economic slowdown, rate cuts by the Federal Reserve and uncertainty created in 2019 by President Donald Trump's escalation of the trade war with China.

Despite the increase in sales, new construction has yet to increase enough to meet the potential demand. There was 5.4 months' supply of new houses on the market in November, down from 6.5 months' supply a year ago.