Driven partially by an increase in the percentage of sales to first-time buyers, existing-home sales grew in May to their highest pace in about a half dozen years, according to the National Association of Realtors®. Nationally, the Northeast region saw the largest sales increases but all major regions experienced sales increases in May.
Total existing-home sales, which tracks completed transactions for single-family homes, townhomes, condominiums, and co-ops, increased 5.1 percent to a seasonally adjusted annual rate of 5.35 million in May from an upwardly revised 5.09 million in April. Sales have now grown year-over-year for eight consecutive months and are 9.2 percent higher than a year ago (4.90 million).
NAR's chief economist, Lawrence Yun, said that home sales in May rebounded nicely following the decline witnessed in April and sales are now at the strongest pace since November 2009 (5.44 million). According to Yun, "Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers." Yun also added that, "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 percent."
- Total housing inventory at the end of May grew 3.2 percent to 2.29 million existing homes available for purchase; this is 1.8 percent more than a year ago (2.25 million). Unsold inventory now sits at a 5.1-month supply at the current sales pace which is down from 5.2 months in April.
- The median existing-home price (all housing types) in May was $228,700, which is 7.9 percent higher than May 2014. This is the 39th consecutive month of year-over-year price gains.
- The share of the market represented by first-time buyers rose to 32 percent in May, up from 30 percent in April and matching the biggest share since September 2012. One year ago in 2014, first-time buyers represented 27 percent of all buyers.