U.S. existing home sales slip 1.5%; prices surge (by Steve Goldstein)

WASHINGTON (MarketWatch) -- Sales of existing homes fell 1.5% in May as fewer cheap homes were sold, a trade group said Thursday. The National Association of Realtors said sales in May reached a seasonally adjusted annual rate of 4.55 million, from an unrevised level of 4.62 million in April. Compared to a year ago, sales were up 9.6%, the 11th straight month of year-on-year gains. Though the U.S. economy hit a little soft spot, the pullback was largely due to an inventory shortage of lower-priced homes, according to Lawrence Yun, chief economist of the NAR. Median prices gained 7.9% year-on-year to $182,600, the highest since June 2010, when the first-time homebuyer tax credit was about to expire. That big gain is due to a shift in the types of homes being sold, rather than re-sale price gains, which is how other home-price gauges are calculated.