WASHINGTON, D.C. — Sales of new homes rebounded in May, helped by strong sales gains in the South and West.

The Commerce Department says sales of new single-family homes rose 2.9 percent last month to a seasonally adjusted annual rate of 610,000. That followed a 7.9 percent drop in sales in April which was the biggest monthly decline in eight months.

Sales gains of 6.2 percent in the South and 13.3 percent in the West overcame big declines of 25.7 percent in the Midwest and 10.8 percent in the Northeast.

The median price of a home sold last month rose to a record $345,800, up 16.8 percent from a year ago. Prices have been increasing as demand has outstripped supply, in part because of a shortage of available building lots.