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WASHINGTON – Sales of previously owned U.S. homes posted the best monthly gain in nearly three years in May, providing hope that housing is beginning to regain momentum lost over the past year.

The National Association of Realtors reported Monday that sales of existing homes increased 4.9 percent last month to a seasonally adjusted annual rate of 4.89 million homes. The monthly gain was the fastest since August 2011, but even with the increase, sales are still 5 percent below the pace in May 2013.

“Sales appear to be moving up again, although the increase to date – over two months – reverses just a fraction of earlier weakening,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics, said in a research note.

Sales had been dampened by last year’s rise in mortgage rates from historic lows and various other factors including tight supplies and tougher lending standards.

The median price of a home sold in May was $213,400, up 5.1 percent from a year ago.

After hitting a recent peak of 5.33 million sales at an annual rate last summer, sales started sliding. Potential buyers have been grappling with a limited supply of houses, more expensive homes and lending standards which have been tightened in response to the housing boom of the past decade which resulted in millions of houses going into foreclosure.

Five years into the recovery from a deep recession that was triggered in part by the collapse in housing, existing home sales have yet to return to their historic averages. Demand remains strong for the most expensive homes but has faltered for starter homes and those priced for middle class buyers.

The pace of home sales is below the 5.1 million homes sold in 2013 and off the pace of 5.5 million annual sales that would be consistent with a healthy housing market.