WASHINGTON - Americans stepped up purchases of new homes in August after cutting back in July, suggesting that higher mortgage rates may not be slowing the housing recovery.

The U.S. Commerce Department says sales of new homes increased 7.9 percent to a seasonally adjusted annual rate of 421,000. That comes after sales plunged 14.1 percent in July to a 390,000 annual rate.

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The rebound in new-home sales could ease worries that higher rates have started to dampen sales. Still, some buyers could be racing to close deals before rates rise further. The average rate on the 30-year fixed mortgage has risen more than a full percentage point since May.

New-homes sales were 12.6 percent higher in August than a year ago. The pace remains well below the 700,000 consistent with a healthy market.