First time buyers fuel rise in us home sales

Photo credit: Cyndie

First time buyers are fuelling a rise in the number of US home sales.

All regions of the US saw existing home sales rise in May 2015, according to National Association of Realtors.

Fueled partly by an increase in the share of sales to first-time buyers, existing-home sales increased in May to their highest pace in nearly six years, according to the National Association of Realtors®. Led by the Northeast, all major regions experienced sales increases in May.

Total existing-home sales - which are completed transactions that include single-family homes, townhomes, condominiums and co-ops - rose 5.1 per cent to a seasonally adjusted annual rate of 5.35 million in May, their highest pace in six years. Sales have now increased year-over-year for eight months in a row and are 9.2 per cent up year-on-year.

"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," comments Lawrence Yun, NAR chief economist.

Indeed, total housing inventory at the end of May increased 3.2 per cent to 2.29 million existing homes available for sale, 1.8 per cent higher than a year ago (2.25 million).

"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." Yun adds. "Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 per cent."

The median existing home price in May was $228,700, which is 7.9 per cent above May 2014. This marks the 39th consecutive month of year-over-year price gains.

While the share of first time buyers rose to 32 per cent in May, up from 30 per cent in April and the highest share since September 2012, rising prices and potential rate increases could soon prevent more from climbing onto the housing ladder.