U.S. home sales rose in May

Existing home sales rose for the second consecutive month for the first time since September 2005, the National Association of Realtors said Tuesday.

Sales of single-family homes, town homes, condominiums and co-ops rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in the month of May, the association said.

From a year ago, sales were down 3.6 percent. Prices were also down substantially with the median price for all types of homes down 16.8 percent to $173,000 compared to a year ago.

Along with low prices, 'historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates,' NAR Chief Economist Lawrence Yun said in a statement.

'First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory,' Yun said.

Existing home sales rose sharpest in the Midwest, up 9 percent in the month with a median price of $145,800. In the South, sales were unchanged with the median price at $157,400. In the West, sales fell 0.9 percent with a median price of $197,700. Homes sales in the Northeast, where the median price was $243,600 in May, climbed 3.9 percent.