The agency reported on Friday that sales of existing homes rose to a 5.18 million-unit annual rate from the 4.91 million unit pace set in August. Economists had expected sales to rise to only a 4.93 million unit rate. It was the first time the sales pace had risen above its year ago level in three years, a sign the market could be stabilizing.
The surprisingly large jump in sales pushed the inventory of unsold homes down by 1.6 percent to 4.27 million, or a 9.9 months' supply at the current pace.
While the inventory is still uncomfortably high, the decline is welcome news for a housing market mired in a deep slump.
Home prices, however, showed no signs of escaping their long, deep slide.
The median national home price declined 9 percent from a year ago to $191,600, the lowest level since April 2004, the industry trade group said.
The increase in sales was spurred by a rise in foreclosure and other 'distress sales' in regions of the country hard-hit by the ongoing housing downturn, said the Realtors' chief economist, Lawrence Yun.
"In some regions, the lower prices are seeing buyers return to the marketplace," he said. "This was a nice jump and hopefully this trend can continue because the first step to stabilizing the market is an increase in home sales."