Sales of existing homes increased 2.6% to a seasonally adjusted annual rate of 5.04 million for June, according to a National Association of Realtors, or NAR, report released Tuesday.

After clocking in at a revised 4.91 million rate for May, analysts were pleasantly surprised by Tuesday's report, having expected a smaller bump to a 4.99 million rate. Compared to June 2013 sales, however, existing-home sales are still down 2.3%. The numbers include completed transactions on single-family homes, town houses, condominiums, and co-ops.

For the same month, the housing inventory increased 2.2% to 2.30 million existing homes, helping to "push overall supply toward a more balanced market," according to the NAR. At the current sales rate, this represents a 5.5-month supply of existing homes, the same as May's supply.

NAR Chief Economist Lawrence Yun gave his seal of approval to June's sales and supplies increases:

Inventories are at their highest level in over a year and price gains have slowed to much more welcoming levels in many parts of the country. This bodes well for rising home sales in the upcoming months as consumers are provided with more choices. On the contrary, new home construction needs to rise by at least 50 percent for a complete return to a balanced market because supply shortages – particularly in the West – are still putting upward pressure on prices.

The current $223,300 median existing-home price is 4.3% above June 2013 levels, and marks the 28th straight month of annual price gains. The median time on the market fell three days from May to 44, and is a week above June 2013's median time.

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