Sales of new homes surged nearly 10 percent from June to July in another sign of a gathering turNARound in the country's long-suffering housing market.

The Commerce Department reported that new-home sales rose 9.6 percent to a seasonally adjusted rate of 433,000 in July. The numbers came on the heels of other reports that have showed housing prices rising in many big cities and sales of previously owned homes picking up. Sales, however, were still down 13.4 percent from a year ago.

As new-home sales surged in the Northeast and the South, the glut of unsold, newly built homes shrank slightly.

The inventory of homes for sale fell to a seasonally adjusted 271,000, which would take 7 1/2 months to sell at the current pace. That is a higher supply of homes than normal but down sharply from a 12-month supply earlier this year.

Inventories are falling in part because construction companies aren't building houses at the pace they were during real estate's boom years. Credit for builders remains tight, and builders are being undercut in many markets by distressed properties such as foreclosures and short sales by homeowners seeking to get out from under their mortgages.

In a sign of those troubles, new homes were spending more than a year on the market before they sold — double the median time of six months it took to sell a new house in 2007.

It's really hard to sell a new home if you're a builder, said Patrick Newport, an economist at IHS Global Insight. It's just a brutal market.

Wednesday's report came a day after the latest Standard & Poor's Case-Shiller home price index showed improvement in 18 of the 20 cities tracked, up from eight in May, four in April and one in March.