U.S. home building ticked up in July thanks to a surge in construction of single-family homes, the latest sign of momentum in the housing market.

The economy grew more than previously estimated in the second quarter on bigger gains in consumer and business spending, showing the U.S. expansion got back on track. A surge in inventories also signals strong growth will be difficult to sustain in the short run. Gross domestic product (GDP), the value of all goods and services produced, rose at a 3.7 percent annualized rate, exceeding all estimates of economists surveyed by Bloomberg, and up from the 2.3 percent the Commerce Department reported last month. The biggest driver of the upward revision for second- quarter GDP was a bigger gain in business investment, which included stronger readings on construction, research and development and inventories.

Sales of existing homes climbed in July to its pre-recession pace, but low inventory and higher prices threaten to curtail those gains heading into the fall. Existing home sales rose 2% last month, from June to a seasonally adjusted rate of 5.59 million, the National Association of Realtors said.

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