Sales of existing homes rose to a 5.49 million annual rate in June, the fastest pace since February 2007, the National Association of Realtors reported Wednesday.

The report showed sales up 3.2 percent on the month, adjusting for seasonal variation, and up nearly 10 percent year-over-year. Sales have risen for nine straight months, reflecting a new high of the business cycle for the housing market.

"Buyers have come back in force, leading to the strongest past two months in sales since early 2007," National Association of Realtors chief economist Lawrence Yun said. "This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that's giving more households the financial wherewithal and incentive to buy."

Yun suggested that the strong sales might have been prompted by rising mortgage rates in the spring, which prompted buyers to act before rates rose further.

Inventory of homes remained tight, at 2.3 million available for sale, a five-month supply. Lack of houses for sale means "declining affordability for prospective buyers," Yun said.

The median price for all types of houses in the month was $236,400, a record high. The median price was 6.5 percent above last year's level.