The housing market in the Indianapolis area posted strong results in May as sales for existing homes and building permits for new construction both enjoyed year-over-year increases.

Purchase agreements in the nine-county area hit 2,330, a 7-percent increase over May 2011. Through the first five months of the year, existing home-sale contracts were up 13.2 percent, according to statistics released Tuesday morning by F.C. Tucker Co.

On Monday, the Builders Association of Greater Indianapolis said single-family building permits in the same area last month spiked 20 percent, to 431, from the same month in 2011. The jump was the strongest year-over-year percentage increase in May in 11 years.

“The [existing housing] market continues to show signs of improvement across central Indiana,” Jim Litten, president of F.C. Tucker, said in a prepared statement. “Inventory is gradually shrinking while sales and prices continue to increase—all signs of market stabilization.”

Pending sales increased last month in eight of the nine counties in the metro area. The exception: Boone County, where activity fell 24.5 percent, from 98 to 74.

In Marion County, sales agreements increased 6.6 percent, from 938 in May 2011 to 1,000 last month. Pending sales in Hamilton and Hendricks counties, however, rose just slightly. In Hamilton, sales ticked up 0.6 percent, from 486 to 489, while sales in Hendricks increased 1 percent, from 198 to 200.

Activity in Johnson County was stronger. Pending sales there in May climbed 8.7 percent, from 173 to 188, compared with the same month last year.

Sales activity is ramping up, even as the number of available homes is down. Central Indiana inventory fell 11.4 percent compared with last May, to 13,752.

Inventory dropped 16.5 percent in Johnson County, 14.9 percent in Marion County and 10.1 percent in Hancock County.

The average sale price in the area increased by 2.1 percent, to $148,352. About 90 percent of the area’s sales agreements in May involved homes priced at $299,000 or less. Agreements were reached on eight homes priced at more than $1 million.