WASHINGTON, June 25 (Reuters) - Sales of U.S. existing homes rose 2.9 percent in May, suggesting the housing market remains strong in an otherwise weak economy, a realtors' group said on Monday.
The National Association of Realtors said sales of existing homes rose to a seasonally adjusted annual rate of 5.37 million units in May from a revised pace of 5.22 million in April.
The May sales pace was 3.5 percent above May of last year and exceeded analysts' expectations for a 5.15 million rate.
The median sales price for single-family homes hit $145,500 in May, the highest on record, NAR said.
The report showed a housing sector that continues to defy expectations. Analysts have been expecting sales figures to peak and the market to cool.
"In spite of an economy flirting with recession, the housing sector continues to display resilience," said David Lereah, chief economist for the realtors' group.
Lereah attributed the abiding strength in existing home sales to continued low interest rates for mortgages. Households also remain confident their economic future is sound, he said.
In addition, some homebuyers may be moving quickly to buy because they believe mortgage rates will rise in future months, he said.
In another sign of a hot market, the number of homes available for sale fell 6.1 percent to 1.53 million in May, a figure that, at May's sales pace, represents only a 3.4 months' supply -- the lowest level since December.
Regionally, the pace of home sales picked up the most rapidly in the Midwest and the South, with increases of 14.1 percent in both regions. Home sales rates rose 8.3 percent in the West and 5.8 percent in the Northeast.
Median home prices were highest last month in the West, where the sales price rose to $196,000. Homes in the Northeast rose to a median price of $149,500, while prices climbed to $138,200 in the South and $124,000 in the Midwest.
Economists have said the strong housing sector is helping keep the overall economy from sliding into recession. With low mortgage rates and home prices that continue to rise, individuals may view their homes as a good investment compared to the volatile stock market, analysts have said.
U.S. 30- and 15-year mortgage rates fell for a third straight week to an average 7.11 last in the week ending June 22, Freddie Mac said on Thursday. The one-year adjustable rate mortgage also fell, hitting 5.74 percent.
A year ago, rates on 30-year mortgages averaged 8.14 percent and ARMs were at 7.22 percent.
Low mortgage rates should contribute to continued health in the housing sector in coming months, Freddie Mac economist Frank Nothaft said last week. In addition, recent strength in U.S. housing starts are prompting the expectation that sales of new and existing homes will remain strong over the second half of the year, he said.
Although housing starts declined slightly in May from the previous month, economists said the pace of ground-breaking and the issuance of permits for future building, which are viewed as indicators of builder confidence, continued to reflect strength in the sector.
Last Tuesday, the Commerce Department said groundbreaking for new homes slid only slightly in May, falling 0.4 percent to a seasonally adjusted annual rate of 1.622 million units, well above the 1.595 million pace Wall Street economists expected.
The National Association of Realtors said sales of existing homes rose to a seasonally adjusted annual rate of 5.37 million units in May from a revised pace of 5.22 million in April.
The May sales pace was 3.5 percent above May of last year and exceeded analysts' expectations for a 5.15 million rate.
The median sales price for single-family homes hit $145,500 in May, the highest on record, NAR said.
The report showed a housing sector that continues to defy expectations. Analysts have been expecting sales figures to peak and the market to cool.
"In spite of an economy flirting with recession, the housing sector continues to display resilience," said David Lereah, chief economist for the realtors' group.
Lereah attributed the abiding strength in existing home sales to continued low interest rates for mortgages. Households also remain confident their economic future is sound, he said.
In addition, some homebuyers may be moving quickly to buy because they believe mortgage rates will rise in future months, he said.
In another sign of a hot market, the number of homes available for sale fell 6.1 percent to 1.53 million in May, a figure that, at May's sales pace, represents only a 3.4 months' supply -- the lowest level since December.
Regionally, the pace of home sales picked up the most rapidly in the Midwest and the South, with increases of 14.1 percent in both regions. Home sales rates rose 8.3 percent in the West and 5.8 percent in the Northeast.
Median home prices were highest last month in the West, where the sales price rose to $196,000. Homes in the Northeast rose to a median price of $149,500, while prices climbed to $138,200 in the South and $124,000 in the Midwest.
Economists have said the strong housing sector is helping keep the overall economy from sliding into recession. With low mortgage rates and home prices that continue to rise, individuals may view their homes as a good investment compared to the volatile stock market, analysts have said.
U.S. 30- and 15-year mortgage rates fell for a third straight week to an average 7.11 last in the week ending June 22, Freddie Mac said on Thursday. The one-year adjustable rate mortgage also fell, hitting 5.74 percent.
A year ago, rates on 30-year mortgages averaged 8.14 percent and ARMs were at 7.22 percent.
Low mortgage rates should contribute to continued health in the housing sector in coming months, Freddie Mac economist Frank Nothaft said last week. In addition, recent strength in U.S. housing starts are prompting the expectation that sales of new and existing homes will remain strong over the second half of the year, he said.
Although housing starts declined slightly in May from the previous month, economists said the pace of ground-breaking and the issuance of permits for future building, which are viewed as indicators of builder confidence, continued to reflect strength in the sector.
Last Tuesday, the Commerce Department said groundbreaking for new homes slid only slightly in May, falling 0.4 percent to a seasonally adjusted annual rate of 1.622 million units, well above the 1.595 million pace Wall Street economists expected.
