Sales of new, single-family homes rose 3.5 percent in October to the highest level in more than a year and a half, the government said Friday.

According to a joint release by the Commerce Department and the Department of Housing and Urban Development, sales increased to a seasonally adjusted annual rate of 733,000 units. That followed a drop of 1.4 percent in September, revised up from a previous estimate of minus 7.8 percent and a gain of 2.1 percent in August.It was the highest sales level since February 1987, when 738,000 homes were sold. It was the sharpest increase since June, when sales rose 5.4 percent.

Sales for the first 10 months are 0.4 percent higher than for the same period a year ago, suprising analysts who were expecting a decline this year.

Economists said a slow fall in long-term mortgage rates between early August and late October contributed to the recent gain. The rates started edging up last month and economists again anticipate softening sales.

By region, sales rose 14.6 percent in the Northeast to an annual rate of 110,000 units, 8.1 percent in the Midwest to a 107,000 unit rate and 5.1 percent in the West to 266,000. In the South, sales fell 3.9 percent to an annual rate of 249,000.

The median price of new homes fell 0.9 percent in October to $115,900, meaning half sold for more and half for less. That followed a 6.4 percent increase in September.