New single-family home sales increased 2.9 percent in May to a seasonally adjusted annual rate of 610,000 units, according to an NAHB analysis of sales data.

Increases ranged from 13.3 percent in the Western U.S. and 6.2 percent in the South.

"We are seeing solid overall growth in new home sales this year," said Granger MacDonald, chairman of the National Association of Home Builders and a home builder and developer from Kerrville, Texas. "Sales are up more than 12 percent from this time last year, and we expect continued gains throughout 2017."

Sales declined 25.7 percent in the Midwest and 10.8 percent in the Northeast.

"This month's report is in line with our forecast, and consistent with solid builder confidence readings," said NAHB Chief Economist Robert Dietz. "With more consumers entering the market, further job growth and tight existing home inventory, the new home sector should continue to expand."