Existing-home sales in the U.S. rose last month to their highest pace in nearly six years, according to data from the National Association of Realtors. The surge was fueled largely by an increase in the share of sales to first-time buyers.
Led by the Northeast, all major regions of the country saw increased sales last month, according to the NAR.
On a national level, total existing-home sales rose 5.1% to a seasonally adjusted annual rate of 5.35 million from an upwardly revised April rate of 5.09 million. Year-over-year sales have now increased for eight months straight, and are 9.2% above a year ago, according to the NAR.
NAR chief economist Lawrence Yun said U.S. existing-home sales are now at their highest pace since November of 2009, when they were at an annual pace of 5.44 million.
“Solid sales gains were seen throughout the country in May as more homeowners listed their homes for sale, and therefore provided greater choices for buyers,” Yun said.
“However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated – even with higher mortgage rates above 4%.”
Total U.S. housing inventory increased 3.2% in May to 2.29 million existing homes available for sale. That’s 1.8% higher than a year ago. Unsold inventory is at a 5.1-month supply at the current sales pace, down slightly from April’s 5.2-month supply.
The median existing home price also continues to rise. The median price for existing homes in the U.S. was $228,700, 7.9% above May of 2014. May marked the 39th consecutive month of year-over-year price gains.
Despite rising prices, the share of first-time buyers rose to 32% last month, up from 30% in April and 27% of buyers in May of 2014.
“The return of first-time buyers in May is an encouraging sign, and is the result of multiple factors – including strong job gain among young adults, less expensive mortgage insurance and lenders offering low down-payment programs,” Yun said.
“More first-time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise.”
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