Rates fuel brisk May homes sales

Low mortgage rates continued to drive brisk sales of new and previously owned houses in May.

Sales of previously owned houses rose 1.2% last month to an annual rate of 5.92 million from 5.85 million in April, the National Assn. of Realtors said. The pace of sales last month was exceeded only by 6.1 million in January and 5.96 million in January 2002.

In a separate report, the Commerce Department said new home sales in May surged 12.5% to a record annual rate of 1.157 million. April sales were 1.028 million.

The supply of existing homes for sale, a gauge of housing demand, fell to 4.7 months’ worth nationally in May, down from 5.1 months in April.

In the West, sales fell 0.6% to an annual rate of 1.59 million. In the South, they dropped 0.4% to a pace of 2.3 million. In the Northeast, sales were up 3% to 680,000. Midwest sales gained 5.5% to a 1.35 million clip.