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Existing Home Sales Up 4.2% in May

iStockphoto/Thinkstock(WASHINGTON) -- The number of Americans who bought a home last month grew by 4.2 percent to nearly 5.2 million, surpassing the five million mark for the first time in more than three years.

National Association of Realtors spokesman Walter Molony said Thursday that home prices are recovering as well.

“The median home price continues to rise by double digit rates from a year ago,” Malony said. “In fact we have six consecutive increases of double digit rates, so that's quite a remarkable run.”

“The national median price was $208,000 in May,” Malony said. “That's up 15.4 percent from a year ago. It's the strongest increase since October 2005, which is a record increase.”

Inventory remains in tight supply, according to Malony.

“Unless new home construction increases very quickly, we need another 50 percent increase in housing starts, so the only way to really moderate future price growth is additional supply from new home building,” Malony said.

“The issue now is pent up demand and strong household growth,” Malony said. “We've got buyer traffic 29 percent above a year ago and this is coinciding with several years of inadequate construction. All that is contributing to abnormal but sustainable price growth.”

Copyright 2013 ABC News Radio

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