The U.S. Department of Commerce reported a surprise increase in new home sales in October, up 0.2 percent to 1.226 million in annual sales, the third highest rate in history.

September sales were also revised upward to 1.224 million (annualized) from the preliminary figure of 1.206 reported earlier.

The median price of new homes also increased to $221,800 from $203,300 reported in September.

New homes sales were up 12.7 percent in the West and 19.7 percent in the Northeast but fell 3.6 percent in the Midwest and 9.1 percent in the South.

Sales of previously owned homes were down slightly to 6.75 million single family homes on an annual basis. This was a decrease of 0.1 percent from the 6.76 million sales track indicated by September´┐Żs figures.