Existing home sales rise 2.4 percent in May

Existing home sales rose 2.4 percent nationally in May as first-time homebuyers looked to take advantage of the $8,000 tax credit before the offer expires in November. CNBC’s Diana Olick said many people are also in a hurry to buy before mortgage rates climb higher. In the northeast, home sales rose higher than the national average, increasing 3.9 percent. However, despite an overall rise in existing home sales, the median home price fell 16.8 percent in May to $173,000 and brokers have expressed concerns about receiving unrealistically low appraisals from appraisers that are not well versed in the area, according to Lawrence Yun, chief economist for the National Association of Realtors. Patrick Newport, an economist at IHS Global Insight, said distressed sales are to blame for the low prices and increasing sales. “Distressed sales are what’s driving down home prices, but they are also what’s driving up existing home sales,” Newport said.