Existing Home Sales Hit Nearly 6-Year High

Fueled partly by an increase in sales to first-time buyers, existing home sales increased in May to their highest pace in nearly six years, coming in at 5.35 million units versus consensus estimates of 5.25 million, according to the National Association of Realtors. All major areas saw increased sales, with the Northeast region in particular showing strength. Sales have now increased year-over-year for eight straight months and are 9.2 percent above a year ago levels. Lawrence Yun, NAR chief economist, said May home sales rebounded strongly following April's decline and are now at their highest pace since November 2009. "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 said. "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." The percent share of first-time buyers was 32 percent in May, an increase from 30 percent in April and matching the highest reading since September 2012. A year ago, first-time buyers represented only 27 percent of all buyers. "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," said Yun. "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." Shares of the

rallied on the news, trading up 1 percent at $37.24.