Dive Brief:
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First-time homebuyers are finally making their way back into the housing market, purchasing 32% of existing homes that were sold in May, the National Association of Realtors reported on Monday.
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Overall sales increased last month to their highest pace in almost six years, with activity rising 5.1% over April and 9.2% over a year ago, the report said. May marks the eighth consecutive month of year-over-year increases in sales of existing homes.
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Homeowners who sold their properties in May also reaped higher prices for them for the 39th consecutive month, the report said. The median existing-home price was $228,700 — 7.9% higher than in May 2014.
Dive Insight:
The first-time homeowner’s share of purchases was 30% in April. May’s showing was the highest since September 2012. In May 2014, first-timers accounted for only 27% of all buyers.
NAR Chief Economist said he welcomed “the return of first-time buyers” in May as “an encouraging sign” that more of them will buy homes in the coming months. He cautioned, however, that how far or fast the newcomers’ share of the market grows could depend on high and how quickly interest rates rise.
The surge in existing homes sales came after an unexpected dip in April. With the positive May numbers, however, economists are writing off that disappointing result as a temporary setback that didn't have a major impact on the overall housing recovery. The NAR has predicted for several months that first-time buyers would start to step into the market, and May's results finally provided concrete evidence.
