Sales of single-family homes increased by 2.8 percent last month to a seasonally adjusted annual rate of 870,000, the U.S. Commerce Department said Friday. June new home sales fell 4 percent an annual rate to 846,000; originally, the government said June sales dropped by 6.6 percent to 834,000.

The median estimate of 23 economists surveyed by Dow Jones was a 1.4 percent decline in July sales to an 822,000 annual rate.

Year over year, new-home sales were 10.2 percent lower than the level in July 2006, The Wall Street Journal said.

The sickly housing sector has pulled down U.S. economic growth for six straight quarters. Groundbreakings by home builders in July fell to the lowest level in 10 years.