This Tuesday, May 24, 2016, photo shows a home for sale in Andover, Mass. (AP Photo/Elise Amendola)

(Bloomberg) – Sales of previously owned homes unexpectedly climbed in June to the highest level in more than nine years, giving a boost to residential real estate as it approached the end of its busy selling season.

Key points

Contract closings climbed 1.1 percent to a 5.57 million annual rate (forecast was 5.48 million), the most since February 2007. Sales increased 1.9 percent from June 2015 before seasonal adjustment. Median price of an existing home rose 4.8 percent from June 2015 to $247,700. Inventory of available properties dropped 5.8 percent from a year earlier to 2.12 million units, the lowest for a June since 2001.

Big picture

Americans buoyed by stable job growth, the promise of higher wages and rebounding stock prices are in good position to take advantage of historically low borrowing costs, keeping the housing recovery on course in the eighth year of the expansion. At the same time, builders are running up against a limited supply of available lots for construction, signaling a limit for real-estate growth.

Economist takeaways

“A lot of factors are still very supportive: low interest rates, improving job market, further modest improvements in wages and incomes — but if there’s not a property in your price range available to buy, it still constrains the overall number of transactions,” Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “Demand is still strong — the choke point is still on the supply,” Lawrence Yun, chief economist at the National Association of Realtors in Washington, said to reporters as the data were released. “The fundamentals still remain strong.”

The details

Sales rose most in the Midwest, where the contract closings climbed 3.8 percent to a 1.35 million pace from the prior month. At the current pace, it would take 4.6 months to sell out housing inventory, compared with 4.7 months in May; less than a five months’ supply is a tight market, the Realtors group has said.

Properties were on the market for 34 days in June, the same as year ago. Single-family home sales climbed 0.8 percent to an annual rate of 4.92 million while purchases of multifamily properties increased 3.2 percent to a 650,000 pace.

First-time buyers accounted for 33 percent of all sales, up from 30 percent in May and the highest share since July 2012. Sales driven in gains among most expensive homes, NAR’s Yun said.

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