Sales of previously owned homes surged in January to the fastest pace since May 2010 in another sign that the housing market is slowly making some headway against its longest dip since the Great Depression.

The National Association of Realtors, a industry trade group, reported Wednesday that existing-home sales -- the lion's share of the housing market -- rose 4.3 percent in January. The equates to a seasonally adjusted annual rate of 4.57 million homes, which is still well below the 6 million pace that economists say is needed for a healthy housing market.

"Overall this is not such a bad number. It's reflective of a better jobs market, but the improvement is going to be in fits and starts," said Yelena Shulyatyeva, U.S. economist at BNP Paribas in New York.

First-time buyers, who are critical to a recovery, increased slightly to 33 percent of sales. In healthy markets, first-time buyers make up at least 40 percent.

Homes at risk of foreclosure made up 35 percent of sales last month, up from 32 percent in December.

The tenor of the report was weakened somewhat by a sharp downward revision to December's sales data to show only a 4.38 million-unit rate rather than the previously reported 4.61 million-unit pace.

That followed an annual revision of the seasonal factors for the series going back three years. Sales in December actually fell 0.5 pct from November, instead of the 5 percent increase reported last month.

There were no revisions to monthly prices and inventory data. Economists polled by Reuters had expected sales to rise to a 4.65 million-unit sales pace.

Still, the report was the latest to add to tentative signs of improvement in the housing market. The inventory of unsold homes on the market is shrinking.

Last month, there were 2.31 million unsold homes on the market last month, the lowest since March 2005. That represented a 6.1 months' supply at January's sales pace, the lowest since April 2006 and down from 6.4 months in December.

A supply of 6 months is generally considered ideal. But the median sales price fell 2 percent to $154,700 in January from a year ago.

The Federal Reserve has suggested a number of ways other policymakers could step in to help the beaten-up market, including giving government-controlled mortgage finance firms Fannie Mae and Freddie Mac a bigger role in refinancing loans.

Reuters and The Associated Press contributed to this report.