Compared to May last year, sales were up 16.9 percent, pointing to some momentum in the new homes market. New home sales are, however, volatile because of the small size of the sample.
Higher mortgage rates and a surge in prices amid a dearth of properties available for sale have weighed on the housing market since the second half of 2013. But as mortgage rates level off, signs of life are emerging.
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A report on Monday showed sales of previously owned homes, the largest segment of the housing market, recorded their largest increase in more than 3-1/2 years in May.
Last month, new home sales increased in all four regions. They hit a six-year high in the Midwest, while sales in the South were the highest since June 2008.
The inventory of new houses on the market was unchanged at 189,000 units. At May's sales pace it would take 4.5 months to clear the supply of houses on the market, the fewest since June 2013. That was down from 5.3 months in April.
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With inventories still tight, the median price of a new home last month increased 6.9 percent from May of last year. The pace of appreciation, however, is slowing. That should help to stimulate demand for houses.