WASHINGTON — Chair Janet Yellen said Thursday that she expects the Federal Reserve to begin raising interest rates from record lows by the end of the year.

In a lecture at the University of Massachusetts at Amherst, Yellen said she thought inflation would gradually move up to the Fed's target rate of 2 percent as unusually low oil prices and other factors prove temporary.

And she suggested that global economic weakness won't likely be significant enough to dissuade the Fed from raising its key short-term rate from zero by December.

WASHINGTON — Buoyed by steady job gains and low mortgage rates, Americans purchased new homes in August at the fastest pace in more than seven years.New-home sales surged 5.7 percent last month to a seasonally adjusted annual rate of 552,000, the Commerce Department said Thursday. That is the strongest pace since February 2008, near the beginning of the Great Recession. Last month's increase followed an even bigger 12 percent jump in July, according to revised figures.Healthy hiring and smaller price increases for new homes have finally begun pushing up sales, which were hammered during the recession.