The demand for newly built homes in the U.S. is growing, a signal that the moribund housing industry may be emerging from the depths of its downturn over the last several years.

The government said Monday that new home sales in May reached an annual pace of 369,000, more than a 7 percent jump over April and the highest figure in two years. The pace, however, is still well below the five-decade average of 671,000 sales.

Home construction and sales of all housing in the U.S. have proved to be the most vulnerable sector of the U.S. economy, the world's largest, as it sluggishly advances from the country's worst economic downturn since the 1930s.

Banks took control of millions of homes in foreclosures when their owners, many of whom had lost their jobs, could no longer make their monthly loan payments. With a glut of foreclosed homes on the market, sales of both new and existing homes have dropped sharply.

But housing prices have started to climb again, with the government saying that the median price for new homes in May was $234,500.