Home resales continue to show some improvement posting a 2.5% advance during May, but they are still down 1.1% compared to this time last year.

The Wells Fargo Securities Group attributed the lower mortgage rates, which led to a rise in mortgage applications for the month-to-month increase. And the group expects that the uptick in inventories - 2.7% year-over-year - will help sales in the near future.

However, single-family home prices are now up 4.6% compared to last year, coming in at $280,000 even though home price appreciation had "been cooling recently," according to the economics group.

"Strong sales in the relatively high-priced Northeast and West likely provided a boost to prices during May," their statement read.