NAR: Existing Home Sales Rebound

WASHINGTON, DC—Existing home sales, including for-sale apartments, reached their highest level in May since the fall of 2009, the National Association of Realtors said Monday. The month's tally rose to a seasonally adjusted annual rate of 5.35 million, coming in at the high end of a consensus of estimates from economists polled by Bloomberg Business.

An increase in the percentage of first-time buyers—who comprised 32% of the total buyer pool for the month, up from 30% in April and 27% a year ago—helped spur the month's gains. Sales for May were up 5.1% over April's upwardly revised annualized total of 5.09 million.

“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,” says Lawrence Yun, NAR's chief economist. “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%.”

Prices have gained on a year-over-year basis for 39 consecutive months, NAR says. May's median price for existing homes rose 7.9% from the year prior to $228,700.

The market favored sales of single-family homes over those of multifamily units including condominiums and co-ops. Single-family home sales jumped 5.6% from the previous month and 9.7% Y-O-Y.  For condo and co-op sales, the month-over-month increase was 1. 6%, and sales were 5.1% higher than May 2014.  Median existing condo prices have also risen more slowly than those of single-family homes over the past year.

Led by the Northeast, all regions of the US saw sales increases over April and the year prior. The biggest gainer in Y-O-Y price increases was the West, where the median of $324,000 was 10.2% over 12 months earlier.

“The return of first-time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low down-payment programs,” Yun says. “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.”