WASHINGTON, DC—Sales of existing homes of all kinds posted a strong month-over-month gain of 4.9% in May, the National 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 seasonally adjusted annual rate of 4.89 million sales for the month beat consensus estimates from 70 economists polled by Bloomberg, who had predicted a median of 4.74 million units.

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

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 annualized rate of single-family and multifamily home sales was 5% below the 5.15 million units seen in May 2013, according to NAR.

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

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

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