WASHINGTON (AP) -- U.S. sales of previously occupied homes rose in January to the second-highest level in three years, a sign that the housing market is sustaining its recovery and helping bolster the economy.
The National Association of Realtors said Thursday that sales rose 0.4 percent in January compared with December to a seasonally adjusted annual rate of 4.92 million. That was the second-highest sales pace since November 2009, when a temporary home buyer tax credit had boosted sales.
The median price for a home sold in January was $173,600, a 12.3 percent increase from a year ago.
Analysts say purchases would be higher if more homes were available. The supply of homes for sale dropped to nearly an eight-year low in January.
The 1.74 million previously owned homes for sale at the end of January represented a 4.2-month supply at January's sales pace. That's the lowest supply since April 2008.
Lawrence Yun, chief economist for the Realtors, said sellers normally begin listing homes in February in advance of the spring buying season. But he said this increase might not be enough to alleviate the tight supply.
The inventory of homes for sale is 25.3 percent below the level a year ago, when there was a 6.2-month supply of unsold homes.
In December, sales declined to a seasonally adjusted annual rate of 4.9 million from 4.96 million in November, according to revised figures released Thursday.
The December drop was linked, in part, to the tight supply of homes.
Analysts foresee further gains this year. Steady hiring and near-record-low mortgage rates have helped boost sales and prices in most markets. Still, sales are being held back by the low supply.