A wave of first-time buyers helped lift home resales in May, with prices moving higher. Bobbi Rebell reports.
A growing number of young Americans are moving out of mom and dad's house - or their rental - and buying a place of their own. First-time home buyers drove U.S. home re-sales to a 5-1/2 year high in May, putting sales on track for their strongest yearly performance since 2007. First-time buyers accounted for 32 percent of transactions, the largest share since September 2012. Moody's Analystics John Lonski: SOUNDBITE: JOHN LONSKI, CHIEF CAPITAL MARKETS ECONOMIST, MOODY'S ANALYTICS (ENGLISH) SAYING: "That provides a lift to sales of those items that ordinarily accompany the purchase of a home furniture appliances, and the like, that building materials could get a lift. So, it's a positive for the economy, and, in fact, thus far in 2015, one of the stronger components of retail sales has been building materials store sales as well as sales at electronic and furniture stores, and that should continue. " The new home buyers coming into the market also reflect moves by the government to ease lending conditions for this demographic through Fannie Mae and Freddie Mac, the mortgage finance companies it controls. SOUNDBITE: JOHN LONSKI, CHIEF CAPITAL MARKETS ECONOMIST, MOODY'S ANALYTICS (ENGLISH) SAYING: "We would have a difficult time sustaining home sales at a historically normal rate, if we were suddenly going to return to the old mortgage lending standard of a 20 percent down payment, and that is for the simple fact that a lot of young households, or households, in general, simply don't have enough, in terms of cash savings to afford a 20 percent down payment at today's still elevated home prices." The median price for a previously owned home increased 7.9 percent from a year ago to $228,700. And the National Association of Realtors said, this year prices could surpass their 2006 peak.