April existing home sales are U.S. record

Sales of existing U.S. homes rose 4.5% in April to a record seasonally adjusted annual rate of 7.18 million, the National Association of Realtors said Tuesday.

Economists had expected sales to be about flat at 6.88 million. March sales were revised lower, to 6.87 million from 6.89 million.

The inventory of unsold homes rose 8.1% to 2.48 million, a 4.2-month supply.

The median sales price rose 15.1% from April 2004, reaching $206,000 -- the fastest year-over-year price gain in 25 years.

The Commerce Department will report on new home sales for April on Wednesday. Economists are looking for a decline to 1.33 million sales on an annualized basis from 1.42 million in March.

In April, sales of existing single-family homes rose 4.5% to a seasonally adjusted annual rate of 6.28 million from 6.01 million in March. Sales of condos rose 4.8% to 899,000 from 858,000.

"A new record is a bit unexpected, but so is the performance of mortgage interest rates, which have been lower than forecast," said David Lereah, chief economist for the realtors trade group. "We can expect low rates for some time."

Mortgage rates have fallen to 5.71% in the latest week from 5.83% in April and 5.93% in March.

Lereah said that he agreed with Federal Reserve Chairman Alan Greenspan that the housing market looks "frothy" in some regions but that there is no national problem.

"We all need to monitor" developments that encourage speculative activity, such as interest-only payment plans, Lereah said.