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 since February 2008.

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.

"The robust demand in the housing market continues," said Tom Wind, executive vice president of home lending at Florida-based EverBank. "We expect factors like strong job growth, low rates, and rising rental costs to continue supporting this trend."

Last month's sales gains were concentrated in the Northeast, where sales jumped 87.5 percent, a likely unsustainable rise that might reflect pent-up demand following an unusually harsh winter. 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. The new construction could spur additional buying that would place new-home sales closer to their historic averages after suffering a steep decline in the aftermath of the housing bust and Great Recession.

"Although the current level of sales is still far from the 700,000 level that is considered healthy, there is still room to move higher," said Jennifer Lee, a senior economist at BMO Capital Markets.

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

Sales of existing homes climbed 5.1 percent in May to a seasonally adjusted annual rate of 5.35 million, the National Association of Realtors said Monday. Tight supplies have lifted prices, which have climbed 7.9 percent over the past 12 months to an average of $228,700, about $1,700 below the July 2006 peak.

Rental home costs are also rising, causing more Americans to look for ownership options this summer before they are priced out of the real estate market. Real estate data firm Zillow said Tuesday that prices nationally climbed a seasonally-adjusted 4.3 in May from a year ago.

Much of the increased home buying activity flows from a stronger job market and relatively affordable mortgage rates.

Borrowing costs are low by historical standards, but they have been rising in recent weeks at a speed that might prompt more people to buy homes before rates rise even higher.

Average 30-year fixed rates were 4 percent last week, according to the mortgage giant Freddie Mac. That average has increased from a 52-week low of 3.59 percent.