The National Association of Realtors (NAR) reports that the seasonally adjusted annual rate of existing home sales in May rose 4.9% to 4.89 million from an upwardly revised total of 4.66 million in April. The month-over-month increase is the largest since a 5.5% gain posted in August 2011.

Sales for the month are down 5% year-over-year. May 2013’s existing home sales came in at a 5.15 million seasonally adjusted annual rate.

The consensus estimate called for sales to reach 4.75 million, according to a survey of economists polled by Bloomberg.

Housing inventory rose 2.2% in May to 2.28 million homes, which is equal to a supply of 5.6 months, slightly lower than the 5.7-month supply in April. Unsold inventory is up 6% compared with May 2013, when there were 2.15 million existing homes for sale.

According to the NAR, the national median existing home price in May was $213,400, 5.1% higher than in May 2013.

NAR’s chief economist said:

Home buyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year. Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates. Rising inventory bodes well for slower price growth and greater affordability, but the amount of homes for sale is still modestly below a balanced market. Therefore, new home construction is still needed to keep prices and housing supply healthy in the long run.

Sales of single-family homes rose 5.7% from April at a seasonally adjusted annual rate of 4.3 million, down 5.7% compared with May a year ago. Sales of multifamily homes remained unchanged month-over-month and year-over-year at an annual rate of 590,000.

Foreclosed and short sales accounted for 11% of May sales, down from 15% in April. Foreclosures sold at an average 18% discount to the May median price, while short sales sold at a discount of 11%.

Existing, non-distressed homes were on the market for an average of 44 days, while foreclosed homes were on the market for an average of 57 days and short sales took a median of 125 days to sell.

Housing inventory continues to rise and mortgage loan rates remain relatively stable at about 1% above the record low levels of a year ago.

 ALSO READ: Annual New Housing Starts Drop to a Million in May

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