In what many economists believe may be the highest numbers in at least three years, home sales are going up as demand for residential real estate continues to give added strength to the economic recovery.

Taken together, the number of new and existing homes which were bought reached the annualized pace of 5.64 million as of last month. This is the quickest pace since November of 2009.

Builder confidence is rising in response to improved sales even while the cost to borrow is going up. The limited supply of homes, lots and materials are also adding to builder confidence.

Federal spending cuts combined with improvements in the housing and auto markets will most likely boost economic growth in the last half of this year.

“The economy is slowly improving,” said Washington-based Roberto Perli, a partner at Cornerstone Macro LP. “I look for the housing recovery to continue. The fundamentals of the market are strong enough to overcome higher mortgage rates.”