WASHINGTON, Aug 25 (Reuters) - Sales of new U.S. single-family homes increased to their highest level in more than 13-1/2 years in July as the housing market continues to show strong immunity to the COVID-19 pandemic, which has plunged the economy into recession and thrown tens of millions of Americans out of work.

The Commerce Department said on Tuesday new home sales rose 13.9% to a seasonally adjusted annual rate of 901,000 units last month, the highest level since December 2006. New home sales are counted at the signing of a contract, making them a leading housing market indicator. June's sales pace was revised upward to 791,000 units from the previously reported 776,000 units.

Economists polled by Reuters had forecast new home sales, which account for about 14% of housing market sales, gaining 1.3% to a rate of 785,000-units. (Reporting by Lucia Mutikani, Editing by Franklin Paul)