US home sales higher for second month in row

WASHINGTON: US existing home sales rose 2.4 percent in May, marking the first back-to-back monthly increase since 2005, an industry group said Tuesday in a sign the troubled sector was steadying.

The National Association of Realtors attributed the increase to "favorable affordability conditions and a first-time buyer tax credit" offered by the US government.

Sales rose to a seasonally adjusted annual pace of 4.77 million homes and apartments, NAR said.

The rise of 2.4 percent followed a similar 2.4 percent increase in April, based on revised figures. But the May sales pace was down 3.6 percent from a year ago.

"Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates," said Lawrence Yun, the group's chief economist.

"First-time buyers also are being drawn off the sidelines by the 8,000-dollar tax credit, which is helping to absorb inventory. However, the increase in sales is less than expected because poor appraisals are stalling transactions."

The group also reported a decline in the glut of unsold homes.

The NAR said total housing inventory at the end of May fell 3.5 percent to 3.80 million homes available for sale, which represents a 9.6-month supply at the current sales pace, down from a 10.1-month supply in April.

The national median existing-home price for all housing types was 173,000 dollars in May, down 16.8 percent from a year earlier, but up from 166,600 a month earlier.

A large proportion of sales came from "distressed properties," although this declined to 33 percent of all sales in May from 45 percent in April.

NAR officials said this distorts the median price.

"The decline in the distressed sales share likely results from an increase of repeat buyers in May," Yun said.

"First-time buyers are concentrated in the lower price ranges, which include most of the distressed sales."

The NAR said single-family home sales rose 1.9 percent to a seasonally adjusted annual rate of 4.25 million in May.

Existing apartment sales including condominiums and co-ops increased 6.1 percent to a seasonally adjusted annual rate of 520,000 units.