US home resales rise to highest level in over 3 years

WASHINGTON (REUTERS) - US home resales rose last month to the highest level in 3-1/2 years and prices jumped, a sign the housing sector recovery is gathering steam and could give the economy a significant boost this year.

The National Association of Realtors (NAR) said existing home sales advanced 4.2 per cent to an annual rate of 5.18 million units, the highest level since November 2009 when a home-buyer tax credit was expiring.

"Whatever inventory is coming onto the market, buyers are ready to snap it up," said Mr Lawrence Yun, an economist at the NAR.

The increase beat expectations for a rise to a 5 million-unit rate last month.

The housing market is one of the brightest spots in America's economy and is helping counter Washington's decision to raise tax rates and cut government spending this year. A very accommodative monetary policy by the Federal Reserve, which has held mortgage rates near record lows, is helping to lift the housing market off the floor. Fed chairman Ben Bernanke, however, gave clear signals on Wednesday that the Fed was on track to start dialing back its stimulus by the end of this year.