The seasonally adjusted annual pace of existing home sales set a new record in March at 4.89 million units-almost 300,000 units higher than economists had anticipated.
Economists had expected sales to fall from February's level, which was revised Monday to 4.77 million units. Instead sales were up 2.5% from February's pace.
"We'll be nipping around record levels right through May," said economist Diane C. Swonk of First Chicago NBD. "We've got a good economy and lower interest rates at a time of wage gains."
Sales rose in March despite slightly higher interest rates. The rate on the 30-year, conventional fixed-rate mortgage was 7.13% in March compared with 7.04% in February, according to Freddie Mac.
March's sales pace was up 18.7% from a year ago, when single-family homes were resold at a 4.12 million unit rate.
The National Association of Realtors forecasts that 4.35 million existing homes will be sold this year, making 1997 the third record-setting year in a row. Last year, 4.22 million homes were resold.