Q2 is looking better for U.S. home sales

Existing home sales jumped a greater-than-expected 5.6% in May to 5.35 mln units annualized, the highest since November 2009. This comes on the heels of an upwardly revised April --- now coming in at 5.09 mln units instead of 5.04 mln units. Another very encouraging report on the U.S. housing market.

The increase in buying activity spanned the country, with all four regions chalking up gains. And, the fact that pending home sales have grown for four consecutive months supports this move. Inventories continue to creep higher and are at a 9-month high of 2.29 mln units, currently. And less supply and more demand meant prices also headed higher. The median price of an existing home was up 7.9% y/y, or 8.6% y/y for a single-family home.

First time homebuyers made up 32% of overall sales, the largest share since September 2012. We can credit that to the stronger job market, a more confident consumer/homebuyer, greater selection. But there may be some anticipation of prices going even higher, which is sparking a move off the sidelines, notes BMO Capital Markets

"The 2nd quarter is looking better for U.S. home sales, both for new and existing." adds BMO Capital Markets