Unprecedented incentives and low interest rates continue to drive home sales upward in Northwest Indiana, with single-family home sales increasing 13.4 percent in May as compared to the month before, according to the Greater Northwest Indiana Association of Realtors.

First-time homebuyers are taking advantage of the $8,000 tax credit provided for in the Obama Administration's American Reinvestment and Recovery Act and historically low interest rates, according to Gene Ayers, of Ayers Realtors Inc.

"We have first-time buyers taking advantage of tremendous opportunities," Ayers said.

At his agency, sales are actually up year-to-date as compared to last year, with particularly strong sales of homes priced below $200,000.

Prices also picked up some strength in Northwest Indiana in May, with the median selling price in the five-county region increasing to $119,900, which is a 6.6 percent increase from the month before, according to the Greater Northwest Indiana Association of Realtors.

Nationally, home sales also increased in May, but at a far slower pace than in Northwest Indiana.

Single-family home sales in the United States increased 1.9 percent in May as compared to April, according to the National Association of Realtors. Still, the annualized rate of 4.25 million homes sold in the month was below the 4.38 million level notched in May of 2008.

"Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable, even with a recent uptick in rates," said Lawrence Yun, chief economist at the National Association of Realtors.

In Northwest Indiana, May was the third straight month home sales have increased, indicating that the rise in sales may be more than just seasonal, according to Pete Novak, executive director of the Greater Northwest Indiana Association of Realtors.

The Greater Northwest Indiana Association of Realtors represents Realtors and reports sales in Lake, Porter, LaPorte, Jasper and Newton counties.

Despite the month-over-month improvement, overall home sales and median prices in Northwest Indiana still lag well below a year ago. Almost 26 percent fewer homes were sold in May than in the same month the previous year, according to the Greater Northwest Indiana Association of Realtors. The median selling price was 11.8 percent lower than one year ago.

Sales of foreclosed and other distressed properties continue to act as a drag on median sales prices, according to Yun and Novak.