From the WSJ:
Sales of previously owned homes surged in May, buoyed in part by the return of younger buyers who had long struggled to find a path into the market.
The pace of existing-home sales rose 5.1% last month from April to a seasonally adjusted rate of 5.35 million, the National Association of Realtors said Monday. Sales for April were revised up to 5.09 million from an initially reported 5.04 million.
Sales last month hit their strongest pace since November 2009. “We’re moving back toward a more normal housing market,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.
Analysts pointed to the return of first-time buyers, who have been cautious for much of the recovery, as evidence the housing market is starting to look more like it did in the early 2000s, before a boom and bust. First-time buyers rose to 32% of all existing-home buyers from 27% a year ago, NAR said. Historically, first-time buyers have made up about 40% of the market.
Significant growth in home prices and sales is unlikely without new buyers. A stronger market for existing homes can help shape the wider economy in part because homeowners invest in things from washing machines to lawn mowers and use their homes to finance other big purchases.
“If you take first-time buyers out of the equation then all you’re doing is shuffling deck chairs around,” Mr. Stanley said.
Still, the recovery has been too uneven for economists to feel certain the housing market is on solid ground. Sales unexpectedly fell in April before recovering last month. One issue is a shortage of new and existing inventory that is pushing up prices and driving potential buyers away.