U.S. existing home sales unexpectedly increased in May, bolstering optimism over the health of the housing market, according to a report released on Wednesday by the National Association of Realtors (NAR).
The industry data showed that home resales increased by 1.1% in May to a seasonally adjusted 5.62 million units from 5.56 million units in the previous month. April’s data was revised down from an initial reading of 5.57 million units.
The consensus forecast was for a 0.5% drop from April’s initial reading to 5.55 million units.
The data helps to gauge the strength of the U.S. housing market and is considered to be a key indicator of overall economic strength.
The report indicated that the sales pace was 2.7% above a year ago and the third highest over the past year.
NAR chief economist Lawrence Yun noted that homes are coming off the market at an extremely fast pace and that listings in an affordable price range are scarce.
According to the report, the median existing-home price in May was $252,800, up 5.8% from May 2016 ($238,900).
“Home prices keep chugging along at a pace that is not sustainable in the long run,” added Yun.
“Current demand levels indicate sales should be stronger, but it's clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions,” he explained.
After the report, EUR/USD was trading at 1.1139 from around 1.1137 ahead of the release of the data, GBP/USD was unchanged at 1.2672, while USD/JPY traded at 111.66 compared to 111.63 before the release.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 97.39, compared to 97.40 ahead of the report.
Meanwhile, U.S. stock markets showed mixed trade after the open. The Dow Jones Industrial Average inched down 9 points or 0.04%, the S&P 500 edged forward 2 points or 0.08%, and the tech-heavy Nasdaq Composite traded up 26 points or 0.43%.
Elsewhere, in the commodities market, gold futures traded at $1,244.45 a troy ounce, compared to $1,244.30 ahead of the data, while U.S. crude oil changed hands at $43.59 compared to $43.59 earlier.