The National Association of Realtors, which tracks sales of existing homes, said sales rose 4.2 percent to a seasonally adjusted annual rate of 5.18 million homes in May -- the highest annual rate of sales since November 2009, when the rate stood at 5.44 million.
Sales were 12.9 percent higher than in May 2012, when the annual rate was 4.59 million.
Some markets have experienced low inventories of homes for sale in recent months, allowing prices to rise. In May, the national median prices for existing homes of all types was $208,000, a 15.4 percent increase from May 2012 and the sixth consecutive month the increase has been in double digits.
May's gain is the largest annual jump since October 2005, the NAR said.
It was the 15th consecutive months of increases, which has not happened since March 2005 to May 2006.
"The housing numbers are overwhelmingly positive. However, the number of available homes is unlikely to grow, despite a nice gain in May, unless new home construction ramps up quickly by an additional 50 percent," said NAR Chief Economist Lawrence Yun.
The total inventory of existing homes on the market rose 3.3 percent from April to May to 2.22 million.
At the current rate of sales, the inventory represents a 5.1-month supply of homes. In April, there was a 5.2 month supply of homes on the market.
Existing home sales rose 1.6 percent in the Northeast and jumped 8 percent in the Midwest. Sales in the South rose 4 percent, while in the West sales rose 2.5 percent, NAR said.