We always keep a close eye on the housing market because of the positive economic impact it can have on the rest of the U.S. economy. On this front, data released last week showed improvement. While some economists believe that the strong spring numbers are a snap back from the drop in activity over the winter months, others are predicting further acceleration. New home sales touched a 7-year high in May after rising 2.2% versus April to a 546k annual rate. Existing home sales, which make up about 90% of housing market activity, rose 5.1% versus April to a 5.35mm annual rate. The percentage of existing home sales that went to first-time home buyers, a data subset contained within this report, offers an encouraging statistic. In May, 32% of existing home sales went to first-time buyers, up from 27% a year ago. While down from the historical average of 40%, an increase in the number of first-time buyers may indicate that lenders are loosening credit standards for borrowers with a limited credit history, that household formation is picking up and/or that the massive student loan burden is diminishing. Whatever the case may be, further acceleration in the housing market would be a good sign for the economy, and might propel the U.S. out of the stagnant growth environment we’ve seen over the last few years.