Sales of new U.S. single-family homes unexpectedly rose in October, hitting their highest level in 10 years amid robust demand across the country.

The Commerce Department said on Monday new home sales increased 6.2 percent to a seasonally adjusted annual rate of 685,000 units last month. That was the highest level since October 2007 and followed September's slightly downwardly revised sales pace of 645,000 units.

New home sales have now increased for three straight months.

That together with last month's increase in homebuilding and sales of previously owned homes suggests the housing market could be regaining momentum after treading water for much of the year.

Read more in CNBC.