WASHINGTON—Sales of newly built homes rose in October, leaving the housing market on track for its best year since 2007.

Purchases of new single-family homes rose to a seasonally adjusted annual rate of 495,000 in October, the Commerce Department said Wednesday, up 10.7% from September's revised 447,000.

Economists surveyed by The Wall Street Journal had expected a figure of 500,000.

October's pace of newly built home sales is up 4.9% from a year earlier.

There were 5.5 months' supply of newly built homes in October, down from 6 months in September.

The median sales price of new homes was $281,500, down 6% from $299,400 in October 2014.

New-home sales figures are volatile and frequently revised. October's headline number has a margin of error of plus or minus 17.7%.

But the broad trend suggests steady improvement for the housing market. The year-to-date rate of new home sales, not seasonally adjusted, is up 15.7% from the same period a year earlier.

And homes appear to be moving quickly, with the median number of months for sale falling to 2.8 in October, the shortest span on record.

Existing-home sales, which constitute 90% of the market, are also expected to reach their best sales level in eight years in 2015. But that market has been challenged by rising prices and low inventories.

The pace of existing-home sales fell 3.4% in October from September to a seasonally adjusted annual rate of 5.36 million, the National Association of Realtors said Monday.

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(END) Dow Jones Newswires

November 25, 2015 10:55 ET (15:55 GMT)