NEW YORK (TheStreet) -- In another positive sign for the continuing economic expansion in the U.S., existing home sales hit a post-recession high, according to last week's housing market reports.
Fueled by an increase in sales to first-time buyers, June existing home sales surged to 5.49 million, the highest figure since the recession (July 2006) and a 3.2% climb from May's then-six-year high of 5.32 million, the National Association of Realtors said last week.
"First-time buyers, made up mostly of Millennials, are leading the charge," veteran New York broker Louise Phillips Forbes said. "That generation is finally getting back to work -- or in some cases entering the workforce for the first time -- and they recognize that real estate is a smart way to diversify their investment portfolio, especially since it's a user asset."
The existing home sales data, which cover the bulk of the market, measure sales and prices of existing single-family homes (including condos and co-ops) for the nation overall with breakdowns of the West, Midwest, South, and Northeast regions of the country.
All major regions experienced sales gains in June and have now risen above year-over-year levels for six consecutive months, NAR said. (Click here for an infographic on June's sales.)
"Buyers have come back in force, leading to the strongest past two months in sales since early 2007," NAR chief economist Lawrence Yun said last week. "This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that's giving more households the financial wherewithal and incentive to buy."
Although Friday's new home sales report by the Commerce Department showed a 6.8% dip from May's bullish 546,000 sales, (itself a seven-year high driven by an 87.5% surge in new homes sold in the Northeast), economists shrugged off June's figures, The Wall Street Journal wrote, citing statistical unreliability and a margin for error of 12.5 percentage points.
"I view [Friday's] reading for the typically volatile new home sales data as statistical noise, most likely just a hiccup on the path to a healthier housing sector," Amherst Pierpont Securities Chief Economist Stephen Stanley said in a note to clients about new home purchases, which account for about 10% of the overall market.
Despite the dip, new home sales numbers are up 18.1% from a year ago, the report said.
While other regions show small declines, Northeast new-home purchases continue to display strong gains with a 28% increase over May's record 87.5% jump.
With a shortage of housing supply -- homes were on the market for an average 34 days in June, the shortest turnaround since NAR started tracking in 2011 -- the demand for real estate should continue, said Amir Korangy, publisher of a New York and South Florida real estate trade publication.
"In a world of tech and stock bubbles, investors are starting to appreciate real assets more than ever before," he said. "Being able to plant your flag somewhere and calling it a home is the all-American investment. With incomes rising and unemployment dropping, more first-time home buyers are jumping into the market."
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.