Sales of existing homes hit their highest levels since October when the numbers for June were calculated. 5.04 million homes were sold in June, and this was the first time existing home sales were above 5 million since October.

While this represents an increase, sales were still 2.3% lower than June of last year. Sales dropped in the late summer and fall of 2013 as mortgage rates rose above all time lows. The number of homes available for sale was also lower after the quick pace of sales during the summer, and prices rose as a result.

Last winter, mortgage rates began to stabilize and then drop again when it became clear that the Fed would not pursue a policy of pushing long-term interest rates upwards. At the same time, more homes began to go on the market or remain on the market longer causing home supplies to increase and prices to drop.

Although sales are up, there is still much room for additional gains. Sales to first time buyers remain low as they accounted for only about 28% of home purchases in June. First time buyers historically account for about 40% of sales.

The Fed has also given indications that they will take additional actions to increase home sales. Fed Chair Janet Yellen recently told Congress that housing sales numbers were disappointing, and a drop in interest rates may soon follow.

The supply of homes available has also steadily grown as buyers remain wary of higher prices. Whether or not mortgage rates continue to fall, motivated sellers can be expected to push home prices lower in the coming months.