Home Sales Rebound

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Existing home sales rebounded 5.1% in May to an annualized pace of 5.35 million, after a decline of 2.3% in April to an upwardly revised rate of 5.09 million. Existing home sales are trending higher and are now 9.2% above their May 2014 pace. Regionally, sales increased in all four census areas, led an 11.3% gain in the Northeast; the other three regions of the country all gained a little over 4.0%. In an encouraging sign, more first time buyers boosted sales tallies last month. First-time home buyers made up 32% of sales in May up from 30% in April; all-cash sales were 24% of transactions unchanged in the last three months; sales of distressed properties were 10% of sales last month, same as the month before; while investors, who account for a share of all-cash sales, comprised 14% of total transactions last month, unchanged from the previous month. The inventory of homes available for sale increased 3.2% on the month to 2.29 million which represents a 5.1 month-supply at the current sales pace. Tight inventory levels pushed prices higher. Year-over-year median home prices were up 7.9% in May to $228,700. Demand fundamentals remain in place as a combination of first-time, returning and second-home buyers enter the market based on improved credit scores and wage growth backed by a solid economic recovery. Demand for homes is on the rise and more sustainable than ever; the housing market is expected to experience a nice bounce over the next two years.

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