U.S. housing market activity likely to remain strong

May sales for existing home in the U.S. grew 1.8 percent to 5.53 million. This was the highest pace seen in nearly a decade, according to the National Association of Realtors. However, the print came in slightly lower than the market projections of a rise to 5.55 million. Moreover, April’s sales were downwardly revised by 20,000 to 5.43 million. The May data for existing home sales was a little disappointing due to below expected print and downward revision to April’s data, said TD Economics in a research report.

Also, first-time homebuyers decline in the month. However, the housing market continues to recover. Activity is bolstering in the midst of declining investor purchases and declining share of distressed sales that aided in increasing transactions in the past, according to TD Economics.

Delving into details, sales for single family segment rose 1.9 percent to 4.9 million. Also, the condo/co-op segments registered a growth of 1.6 percent to 630,000. Median prices rose 4.7 percent year-on-year, the slowest pace in almost one year. Single-family homes lagged the gains in price slightly, with values rising 4.6 percent year-on-year.

Meanwhile, share of distressed sales dropped slightly to 6 percent, down one percentage point from April and quite below the 10 percent seen a year ago. The share of first-time buyers was 30 percent in May, down from 32 percent both in April and a year ago. First-time buyers in all of 2015 also represented an average of 30 percent, stated National Association of Realtors.

Of the total sales, investors accounted for 13 percent, same as in April and slightly below the 14 percent in May 2015. Inventory of unsold homes was up slight, with 1.9 million properties listed at present. Nonetheless, sales inventory measure for May, as a share of sales volumes, continued to be at 4.7. Both condo/co-op inventories and single-family inventory were equally tight.