Existing-home sales rose in May at their highest monthly growth rate in years as inventory continued to expand, the National Association of Realtors  (NAR) reported Monday.
According to NAR, total existing-home sales —representing completed transactions of single-family homes, townhomes, condominiums, and co-ops—jumped 4.9 percent last month to a seasonally adjusted annual rate of 4.89 million. It was the biggest month-over-month boost since August 2011, when sales picked up 5.5 percent, the group reported.
Isolating just single-family transactions, sales numbers increased 5.7 percent to an adjusted rate of 4.30 million.
"Home buyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year," said NAR chief economist Lawrence Yun. "Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates."
Still, compared to last year, overall sales remained down 5.0 percent, reflecting a higher-cost environment that has driven out some otherwise interested shoppers.
In May, the median existing-home price for all housing types was $213,400, a 5.1 percent increase year-over-year. The median single-family home price was slightly higher at $213,600.
Home price gains have slowed down over the last half-year, helped in part by increased supply. Last month, NAR reports total housing inventory available for sale was up 2.2 percent to 2.28 million existing homes, representing a 5.6-month supply at the current sales pace.
Though an improvement over last year, NAR says current home inventories are still below where they should be for a balanced market, which should come to about a six-month supply. In a report earlier this month , the group said lack of construction is the main problem, with housing starts falling far short of employment gains in many areas across the country.
Looking forward, the association hopes further inventory gains and moderation in price increases will spur more activity in the coming months.
"The temporary pause in rising interest rates and more homes for sale is good news—especially for first-time home buyers—who likely have a better chance in upcoming months to make a competitive offer that's in return accepted by the seller," said NAR president Steve Brown.