WASHINGTON (AP) — Sales of new homes recovered in October after suffering a steep drop in September, returning to this year's trend of an improving market for real estate developers and builders.

The Commerce Department said Wednesday that new-home sales climbed 10.7 percent last month to a seasonally adjusted annual rate of 495,000. This rebound followed a 12.9 percent plunge in the sales rate during September.

Americans recovered much of their appetite for owning new homes this year. Purchases have surged 15.7 percent year-to-date, benefiting from the solid hiring gains and low mortgage rates.

"We still see new homes sales consistent with a moderate and sustained recovery in the housing market," said Blerina Uruçi, an analyst at Barclays.

The new-home sales report tends to be volatile from month to month. Downward revisions lowered home sales reported in September, August and July by a combined 40,000.

The October figures reflected some geographical extremes. Home-buying surged 135.5 percent in the Northeast, while rising less aggressively in the Midwest and South. Sales dropped slightly in the West.

But prices dipped last month despite other industry reports indicating that real estate prices have eclipsed income growth. In October, the median new-home sales price fell 8.5 percent from a year ago to $281,500.

The real estate sector is still healing from the bursting of the housing bubble and the 2008 financial crisis. Sales of new homes remain below the 52-year historic average of 655,200.

There are other signs that the sales gains of the past year are levelling off after improvements in prior months. Sales of existing homes began to slow last month, a sign that rising prices are creating affordability problems for many would-be buyers.

The National Association of Realtors said Monday that sales of existing homes fell 3.4 percent in October to a seasonally adjusted annual rate of 5.36 million.

Despite that monthly decline, existing- home purchases have increased 3.9 percent from a year ago. The sales improved even though potential buyers face slim picking as the number of listings on the market has dropped 4.5 percent.

Low mortgage rates have eased some home sales. But rates have started to rise ahead of a December Federal Reserve meeting, where Fed officials are expected to raise short-term rates for the first time in nearly a decade.

The average, 30-year fixed mortgage rate was slightly under 4 percent this week, compared to 3.79 percent a month ago, according to mortgage buyer Freddie Mac.