Existing home sales in the U.S. sprang to their highest level in over nine years in the month of May, the National Association of Realtors revealed in a report on Wednesday.
NAR said existing home sales rose by 1.8 percent to an annual rate of 5.53 million in May from a downwardly revised 5.43 million in April.
Economists had expected existing home sales to climb 2.2 percent to a rate of 5.57 million from the 5.45 million originally reported for the previous month.
While existing home sales increased by slightly less than expected, the rate of sales in May was the highest since reaching 5.79 million in February of 2007.
"The primary driver in the increase in sales is more homeowners realizing the equity they've accumulated in recent years and finally deciding to trade-up or downsize," said NAR chief economist Lawrence Yun.
He added, "With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now."
The report also said the median existing-home price was $239,700 in May, up 3.8 percent from $230,900 in April and up 4.7 percent from $228,900 in the same month a year ago.
NAR said the median sales price of an existing home subsequently surpassed the peak of $236,300 set last June.
Housing inventory climbed 1.4 percent to 2.15 million existing homes available for sale at the end of May from 2.12 million for sale at the end of April but is still down 5.7 percent a year ago.
The unsold inventory in May represents 4.7 months of supply at the current sales pace, unchanged from the previous month.
"Existing inventory remains subdued throughout much of the country and continues to lag even last year's deficient amount," said Yun. "While new home construction has thankfully crept higher so far this year, there's still a glaring need for even more."
Thursday morning, the Commerce Department is scheduled to release a separate report on new home sales in the month of May.
New home sales after expected to slump by 8.7 percent to a rate of 565,000 after jumping by 16.6 percent to a rate of 619,000 in April.
by RTT Staff Writer
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