Sales of newly built single-family homes posted a slight increase in September, rising 2.7 percent to a seasonally adjusted annual rate of 464,000 units, according to a U.S. Dept. of Commerce report released Monday. The report also indicated that builders are making substantial progress depleting the supply of unsold units on the market.

The number of new homes for sale fell to 394,000 units in September, compared with 425,000 units in August. At the current sales pace, there was a 10.4 months' supply of unsold new units on the market, compared with an 11.4 months' supply in August. Conversely, the median number of months that completed new homes have been on the market hit a new record of 9.1 months.

Regionally, sales activity gained 22.7 percent in the West and 0.7 percent in the South in September, but at the same time declined 21.4 percent in the Northeast and 5.8 percent in the Midwest.