Existing home sales hit 9-year high

Washington

US home resales rose in May to a more than nine-year high as improving supply increased choice for buyers, suggesting that the economy remains on solid footing despite a sharp slowdown in job growth last month.

The National Association of Realtors said on Wednesday that existing home sales increased 1.8 per cent to an annual rate of 5.53 million units last month, the highest level since February 2007.

April's sales pace was revised down to 5.43 million units from the previously reported 5.45 million units. Economists polled by Reuters had forecast sales rising 1.1 per cent to a 5.54 million-unit pace in May.

Sales were up 4.5 per cent from a year ago.

The strong home resales added to retail sales data in painting an upbeat picture of the economy. That should help allay fears about the economic outlook which were stoked by last month's paltry job gains.

Existing home sales surged 4.1 per cent in the north-east and climbed 4.6 per cent in the South. Sales in the West, which has seen a strong increase in house prices amid tight inventories, jumped 5.4 per cent.

In the midwest, sales tumbled 6.5 per cent last month. The decline, however, followed recent hefty gains.

The number of unsold homes on the market in May rose 1.4 per cent from April to 2.15 million units. Supply was, however, down 5.7 per cent from a year ago.

At May's sales pace, it would take 4.7 months to clear the stock of houses on the market, unchanged from April. A six-month supply is viewed as a healthy balance between supply and demand.

With inventory still tight, the median house price soared 4.7 per cent from a year ago to a record US$239,700 last month. REUTERS