In its latest existing home sales report, the National Association of Realtors says that first-time buyers accounted for 32 percent of all U.S. home purchases last month, up from 30 percent in April and 27 percent from one year ago. First-time buyer activity is now at its highest level since September 2012.
“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,” NAR Chief Economist Lawrence Yun said in a statement accompanying the report. “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.”
First-time buyer activity helped push U.S. existing home sales – which includes single-family homes, condominiums, townhouses, and co-ops – to 5.35 million in May, the most since November 2009. Home sales rose 5.1 percent from April and 9.2 percent from one year ago.
The median U.S. home price climbed to $228,700, the 39th consecutive month of year-over-year gains. Yun noted that the U.S. housing supply remains constrained and that prices will likely stay high without sufficient levels of new construction. In May, the U.S. months’ supply of inventory (MSI) was 5.1, meaning that the housing market still favors sellers. Tight inventory conditions mean that homes are also selling relatively quickly – an average of 40 days in May, the third fastest pace since NAR began tracking that metric four years ago.
In California and the Bay Area, supply conditions are considerably tighter than they are nationwide, and homes are selling at an even brisker clip. According to the California Association of Realtors’ latest home sales and price report, the statewide MSI for single-family homes was 3.5 in May, unchanged from the previous month. Homes sold in an average of 28.5 days, faster on both a month-over-month and year-over-year basis.
Six Bay Area counties had the fewest homes for sale in California in May, with the MSI ranging from 1.7 in San Mateo County to 2.3 in Marin County. Across the nine-county Bay Area, homes sold in an average of 20.9 days, with San Mateo (17.1 days), Santa Clara (17.5 days), and San Francisco (19.2 days) counties the state’s quickest-moving real estate markets.
(Photo: Flickr/Tax Credits)