U.S. home resales jumped more than expected in March to their second-highest pace on record, as home buyers rushed to take advantage of low mortgage rates, a trade association report showed on Tuesday.
Sales of previously owned homes climbed 5.7 percent to a seasonally adjusted annual rate of 6.48 million units in March from an upwardly revised 6.13 million unit rate in February, the National Association of Realtors said.
March was the fastest clip of existing home sales since September's 6.68 million level.
Analysts had been expecting a 6.20 million annual sales pace.
"Obviously, low mortgage rates in February and March fueled sales and probably will fuel home sales in April and May as well," said David Lereah, the group's chief economist.
"The combination of a healthy economy -- we started to see some job gains -- and low mortgage rates provided a great backdrop for housing activity," he added.
Inventories in March slimmed to 4.4 months' supply of homes available for sale at the current sales pace.
The median sales price of a pre-owned home rose 7.4 percent from the same month a year ago to $174,100.
Buyers snapped up homes at a record pace in 2003 as mortgage rates slid to the lowest levels since the early 1960s. Rates rose toward the end of last year, but dipped again in early 2004 as worries about slow job creation undermined confidence in the U.S. economic recovery.
However, reports last month showed the United States is adding jobs, raising the possibility the Federal Reserve may move interest rates up from 1958 lows.
The Fed funds rate stands at 1 percent after a string of 13 cuts to boost the economy out of recession and nurse it past a sequence of setbacks, including the Sept. 11, 2001 attacks on New York and the Washington area.
Mortgage finance giant Freddie Mac said last week that the national average for the 30-year fixed rate mortgage rose for the fifth week in a row to 5.94 percent, the highest level since December.