Housing inventory jumped 3.2 percent higher by the end of May when compared to the previous month
Chicago, IL (PRWEB) July 04, 2015
Lenders like The Federal Savings Bank were excited to see that first-time home buyers were largely responsible for the increase in existing home sales that occurred in May. According to a National Association of Realtors report released on June 22nd, the total number of all completed transactions increased 5.1 percent.
Existing home sales rise
The NAR's survey accounted for completed transactions on the following types of residential locations:
- Single-family homes
The sales of these properties has increased on a year-over-year basis for 8 consecutive months. In addition, the sales reported in May are 9.2 percent higher than the same time a year ago.
"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," said Larence Yun, the NAR's chief economist. "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."
Inventory increased in May
In addition to a higher volume of completed sales, homes available to potential buyers also rose to meet the demand. Housing inventory jumped 3.2 percent higher by the end of May when compared to the previous month. A total of 2.29 million existing homes were available to interested home buyers.
This is also up 1.8 percent when compared on a year-over-year basis. With a higher volume of completed sales, a larger inventory of available real estate and property is crucial.
First-time buyers become major player in market recovery
The highly anticipated return of the first-time home buyer may have finally arrived. In fact, the number of individuals purchasing a home for the first time increased 32 percent in May. This is up from 30 percent in April and 27 percent on a year-over-year basis.
"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," noted 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."
The improving economic conditions and stronger job security likely contributed to a higher number of first-time buyers deciding to make the move toward homeownership.
Improving economy means stronger housing market
According to a press release from The Conference Board released on June 18th, The Leading Economic Index was released on June 18. It indicated the economic situation in the U.S. is continuing to improve.
"The U.S. LEI increased sharply again in May, confirming the outlook for more economic expansion in the second half of the year after what looks to be a much weaker first half," said Ataman Ozyildirim, The Conference Board's director. "While residential construction and consumer expectations support the more positive outlook, industrial production and new orders in manufacturing are painting a somewhat more mixed picture."
Contact the Federal Savings Bank, a veteran owned bank, to learn more about mortgages.