WASHINGTON (MarketWatch) — Existing-home sales in July jumped to their highest level since late 2009, as buyers looked to lock in mortgage rates before they rise further, according to data released Wednesday morning.

The National Association of Realtors reported that existing-home sales in July rose 6.5% to a seasonally adjusted annual rate of 5.39 million. That level was the highest since late 2009, when buyers rushed to meet a tax-credit deadline.

Economists polled by MarketWatch had expected July’s existing-home sales to reach a rate of 5.21 million, compared with an original June estimate of a 5.08 million rate. On Wednesday, NAR revised June’s rate to 5.06 million.

With sales up 17.2% from the prior year, the latest report shows a market that continues to rebound. Economists expect pent-up demand to continue to support sales, but there’s also concern over the longer-term impact of rising rates on affordability.

Since early May, the average rate for the 30-year fixed-rate mortgage has increased more than one percentage point to hit 4.40% this month, according to weekly data from federally controlled mortgage buyer Freddie Mac FMCC, -2.06% . Since rates started rising, applications for home-purchase loans have declined, and applications to refinance have dropped, according to weekly reports from the Mortgage Bankers Association.

Although existing-home sales have been rising for three years, there’s still room for growth. July’s annual rate was below an average pace of about 6.1 million over the five years that led up to a 2005 peak of about 7.2 million.

Economists say limited inventory, as well as slow employment growth, have hampered sales. On Wednesday, NAR said inventories rose 5.6% to 2.28 million homes available for sale in July, representing a 5.1-month supply at current sales rates. Despite that increase, supply remains below the year-earlier level of 6.3 months.

“The situation still remains tight, but other industry reports suggest that we appear to be in the early stages of a loosening up in the inventory situation,” said Stephen Stanley, an economist at Pierpont Securities.

Rising prices may support inventories, as more sellers are willing and able to place their homes on the market. NAR reported the median price of a home was $213,500 in July, up 13.7% from the year-earlier level. NAR added that all-cash deals remained high in July, while there were relatively few first-time buyers and distressed sales.

Prices continuing to rise as such high annual rates could spell trouble. The market needs home builders to ramp up production and expand inventories, said Lawrence Yun, NAR’s chief economist. However, builders face a variety of headwinds.

On Friday, the government will report new-home sales, and economists expect the annual rate to decline to 485,000 in July from a rate of 497,000 in June.