A surge in first-time home buyers helped fuel the boost in US home sales in May, according to numbers released Monday from the National Association of Realtors (NAR). Sales of existing single-family homes, townhouses, condos and co-ops rose to a seasonally adjusted annual rate of 5.35 million last month, a 5.1 percent increase over April. Year-over-year, sales were up by 9.2 percent. It was also the eighth month in a row that measured a year-over-year increase in sales.
The last time home sales in the US were this high was roughly six years ago, when the association counted 5.44 million sales in November 2009.
Last month, first-timers made up 32 percent of all home buyers, up from 30 percent in April, and 27 percent in May 2014.
“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 downpayment programs,” said Lawrence Yun, chief economist at NAR.
“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.”
In May, sales of single-family homes rose by 9.7 percent from the same time the year before. Along with this flurry in activity, prices also rose. The median sale price for an existing single-family was $230,300 in May, an 8.6 percent jump, year-over-year.
The condo sector also saw a boost, albeit not as big as the single-family market. Year-over-year, sales were up by 5.1 percent. The median price rose 1.9 percent from May 2014 to $216,400.
NAR remains concerned about inventory levels keeping pace with demand.
“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 percent,” said Yun.