Existing home sales increase to highest level since November 2009

Buyers purchased existing homes at a more rapid clip last month, propelling nationwide sales to the highest level in nearly four years and sending prices upward.

Sales of existing homes in May increased 4.2% to a seasonally adjusted annual rate of 5.18 million, the National Assn. of Realtors said Thursday. That was 12.9% higher than May 2012 and the highest rate since November 2009 when a national homebuyer tax credit helped propel sales.

The median sales price for a resold house, town home, condo or co-op rose 15.4% from a year earlier to $208,000 last month. That’s the largest increase since October 2005, the Realtor group said.

“The housing numbers are overwhelmingly positive,” Lawrence Yun, chief economist for the association, said in a statement.

Tight inventory, low mortgage rates and an improving economy have caused dramatic double-digit price gains and helped turn the housing market into an economic bright spot.

Southern California’s housing recovery: An interactive map

But Yun offered a caution about the swift price increases and said he expects a limited supply of homes for sale for the remainder of the year.

“The home price growth is too fast, and only additional supply from new homebuilding can moderate future price growth,” he said.

The number of existing homes on sale rose 3.3% from April to 2.22 million in May. At the current sales pace, that represents a 5.1-month supply. In April, there was a supply of 5.2 months, because homes sold at a slower rate.

In May 2012, there was a supply of 6.5 months.

ALSO:

Housing starts climb 6.8% in May

Homebuilder confidence jumps to a 7-year high

Huge home price gains expected to moderate as supply increases