WASHINGTON, DC—Sales of existing homes of allkinds posted a strong month-over-month gain of 4.9% in May, theNational Association of Realtors said Monday.However, the figures on for-sale apartments,including condominiums and co-ops, were flat compared to April,while single-family homes posted a 5.7% increase, The seasonallyadjusted annual rate of 4.89 million sales for the month beatconsensus estimates from 70 economists polled by Bloomberg, who hadpredicted a median of 4.74 million units.

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“Home buyers are benefiting from slower price growth due to themuch-needed, rising inventory levels seen since the beginning ofthe year,” driven in part by a lackluster first quarter, saysLawrence Yun, NAR's chief economist. “Moreover,sales were helped by the improving job market and the temporary butslight decline in mortgage rates.”

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The median price of existing homes that sold during May was$213,400, a 5.1% year-over-year increase. For condos and co-ops,the Y-O-Y gain was even greater at 6.6%. However, the annualizedrate of single-family and multifamily home sales was 5% below the5.15 million units seen in May 2013, according to NAR.

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Commenting on Monday's report, Stephanie Karol,US economist with IHS Global Insight, says most ofMay's improvement can be attributed to last month's inventoryexpansion, which drew buyers. “With disproportionately more newbuyers than new sellers, the resulting competition was enough tocause the average (and median) home to fetch a higher price in Maythan it would have done in April,” she says.

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Karol calls this “a good sign. As long as sellers feel assuredof making a profit, they will feel emboldened to list their homes;and as buyers feel they have a good selection of well-locatedproperties to choose from, they will continue to look and bid.”

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Longer term, though, a shortage of new supply is a concern, NARreported earlier this month. “Historically, there's one new homeconstruction for every one-and-a-half new jobs,” Yun said two weeksago. “Our analysis found that a majority of states are constructingtoo few homes in relation to local job market conditions. This lackof construction has hamstrung supply and slowed home sales.”

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.