Sales of existing homes in the United States rose unexpectedly by 6.5 percent in December 2008 to a seasonally adjusted annual rate of 4.74 million units, the National Association of Realtors (NAR) reported on Monday.

Existing home sales -- including single-family, townhouses, condominiums and co-ops -- in November was revised downward to 4.45 million units.

While sales gained, home prices were down last month. The national median price of existing homes plunged by 15.3 percent from a year ago to US$175,400, the lowest level since May 2003.

The 15.3-percent drop was the biggest year-over-year decrease on records going back to 1968. The median price is the point at which half of existing homes are sold for more and half sold for less.

For all of 2008, existing home sales plummeted more than 13 percent from a year earlier to 4.9 million units, marking the lowest total since 1997.

In one encouraging sign, the inventory of unsold homes at the end of December fell nearly 12 percent to 3.7 million units, the lowest level since January 2007.

At the December sales pace, it would take 9.3 months to eliminate the overhang of unsold homes, down from 11.2 months in November.

"The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions," said NAR chief economist Lawrence Yun while releasing the report.

"Buyers will continue to have an edge over sellers for the foreseeable future," he added.

Yun said the market is underperforming and hurting the broader economy. He called on lawmakers to include tax credits for home buyers in the economic recovery package being considered by Congress.

"The economy just simply cannot recover as long as home prices continue to decline," the economist said.

(Xinhua News Agency January 27, 2009)