US existing home sales rose 2.4% in May in a sign that the troubled sector is steadying, according to US industry group, the National Association of Realtors. This marks the first back-to-back monthly increase since 2005.
The National Association of Realtors attributed the increase to 'favourable affordability conditions and a first-time buyer tax credit' offered by the US government. They said that historically low mortgage interest rates drew buyers into the market, and housing remains very affordable even with a recent uptick in rates. The also said that the $8,000 tax credit was encouraging buyers.
However, they said 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% to 3.8 million homes available for sale.
