WASHINGTON - SALES of previously owned US homes rose for a second straight month in May but were weaker than expected, adding to growing fears of an anemic economic recovery from a deep recession.

The chief economist of the National Association of Realtors (NAR), which released the data on Tuesday, said sales in some areas appeared to be slowing and warned of the danger of a 'delayed' housing market recovery.

The Realtors' group said sales climbed 2.4 per cent last month to an annual rate of 4.77 million units. While that pace was below market forecasts it was the second straight month sales had risen, for the first back-to-back gain since September 2005.

Despite signs the market is stabilising, NAR said the median national home price fell 16.8 per cent in May from a year earlier, the third-largest drop on record.

A separate government report on Tuesday showed home prices fell 6.8 per cent year-on-year in April after dropping 7.3 per cent the previous month.

'The housing number suggests that things are bottoming, but that's a far cry from improving. The markets are focused on how fast the recovery is going to be, and I think it won't be as fast as people are thinking,' said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.

The Realtors report showed sales remained down 3.6 per cent compared to May last year. Distressed sales made up 33 per cent of the sales in May, but this compared to the 45 to 50 per cent seen in the past few months.

Other housing data have also suggested the three-year housing slump was nearing a bottom but a surge in mortgage rates and persistently high unemployment threaten this budding optimism.

'There is a danger that the recent surge in mortgage rates will snuff out a recovery before it even begins,' said Paul Dales, an economist at Capital Economics in Toronto.

Collapsing home values and tighter access to credit are forcing US households to become more frugal, a trend that could make the widely anticipated economic recovery in the second half of 2009 feeble and lacking on the jobs front. -- REUTERS