New dwellings accounted for almost 7 percent of the market last year, down from a high of 15 percent during the boom of the past decade. Sales of new homes climbed 7.6 percent to a 369,000 annual rate in May, a Commerce Department report showed June 25.
Compared with a year earlier, May pending sales of previously owned properties climbed 15.3 percent after a 14.7 percent surge in April.
Contract signings climbed in all four regions, today's report showed, including a 14.5 percent jump in the West and a 6.3 percent gain the Midwest.
A decline in transactions involving foreclosures and short sales, where a lender agrees to accept less than the balance of the mortgage, helped push up the median price of a previously owned house up 7.9 percent from the same time last year, the biggest 12-month gain since February 2006, last week's data showed.
Mortgage Rates
Low borrowing costs continue to attract buyers. The average rate on a 30-year fixed mortgage dropped last week to 3.66 percent, the lowest since Freddie Mac record-keeping began in 1972.
Builders like Lennar Corp. are seeing improvement in the housing market. The third-largest homebuilder by revenue said today that net income for the three months through May rose to $452.7 million, or $2.06 a share, from $13.8 million, or 7 cents, a year earlier.
"Evidence from the field suggests that the 'for sale' housing market has, in fact, bottomed and that we have commenced a slow and steady recovery process," Chief Executive Officer Stuart Miller said in the statement.
Orders at the company climbed to 4,481 homes from 3,204 a year earlier. The Miami-based builder's backlog jumped 61 percent.