SYMBOL LOOKUP
HOME
By Courtney Schlisserman
April 23 (Bloomberg) -- Home resales in the U.S. probably slipped in March after jumping a month earlier by the most in more than five years, indicating the market will not rebound quickly, economists said before a report today.
Purchases of existing homes fell 1.5 percent to a 4.65 million annual pace from 4.72 million a month earlier, according to median forecast in a Bloomberg News survey. The 5.1 percent jump in February sales was the biggest gain since July 2003.
Record-low mortgage rates and a foreclosure-driven plunge in prices are making houses more affordable, raising speculation the market may be stabilizing following the biggest slump since the Great Depression. Even so, mounting job losses dim prospects for an immediate recovery.
“We’re still bumping along at the bottom,” said Kurt Karl, chief U.S. economist at Swiss Reinsurance Co. in New York. “We’re going to have this slow grinding improvement through the next three to six months in the general economy and also in housing.”
The report from the National Association of Realtors is due at 10 a.m. in Washington. The median forecast was based on 69 estimates that ranged from a low 4.37 million rate to 4.9 million.
A report from the Labor Department at 8:30 a.m. will probably show jobless claims last week increased after dropping to the lowest level in three months the previous week, the survey showed.
Jobs, Foreclosures
A weak job market is one reason economists project foreclosures will keep rising as unemployed owners fall behind on mortgage payments. A total of 803,489 properties received a default or auction notice or were seized in the first quarter, the highest since records began four years ago, said RealtyTrac Inc., an Irvine, California-based seller of mortgage data.
The surge in foreclosures is causing prices to drop, making homes more affordable, particularly for first-time buyers, the real-estate agents’ group said last month. Distressed properties accounted for about 45 percent of all home resales in February, the group said.
Additionally, government efforts to lower borrowing costs and unclog lending may be starting to pay off. The average rate on a 30-year fixed mortgage fell below 5 percent for the second time on record in the week ended March 19 and has held below that since, according to Freddie Mac. It reached a record-low 4.78 percent in the week ended April 2.
The NAR’s affordability index, which tracks mortgage rates, home prices and incomes, surged in February to the highest level in 20 years of data.
‘Tentative Signs’
Federal Reserve Chairman Ben S. Bernanke said last week that “we have seen tentative signs that the sharp decline in economic activity may be slowing,” citing housing and retail sales. “A leveling out of economic activity is the first step toward recovery.” Central bankers are due to meet again next week.
While demand for foreclosed homes has boosted resales, it may be depressing purchases of new homes, which plunged to a record low in January.
“The housing market continued its downward trend throughout our first quarter,” Lennar Corp. Chief Executive Officer Stuart Miller said in a statement on March 31. “Increased unemployment and growing foreclosure rates negatively impacted new-home sales in most of our markets.”
Lennar reported a wider first-quarter loss and said orders fell 28 percent. The company wrote down $10.2 million for 1,100 home sites it no longer intends to build on and said new orders tumbled in January and February.
Bloomberg Survey
================================================================
Initial Cont. Exist Exist
Claims Claims Homes Homes
,000’s ,000’s Mlns MOM%
================================================================
Date of Release 04/23 04/23 04/23 04/23
Observation Period 18-Apr 11-Apr March March
----------------------------------------------------------------
Median 639 6120 4.65 -1.5%
Average 641 6124 4.66 -1.2%
High Forecast 700 6180 4.90 3.8%
Low Forecast 610 6050 4.37 -7.4%
Number of Participants 42 14 69 69
Previous 610 6022 4.72 5.1%
----------------------------------------------------------------
4CAST Ltd. 657 --- 4.75 0.6%
Action Economics 640 6050 4.65 -1.5%
AIG Investments --- --- 4.60 -2.5%
Aletti Gestielle SGR --- --- 4.60 -2.5%
Ameriprise Financial Inc 635 6180 4.65 -1.5%
Argus Research Corp. --- --- 4.70 -0.4%
Bank of Tokyo- Mitsubishi 636 --- 4.74 0.4%
Bantleon Bank AG --- --- 4.76 0.9%
Barclays Capital 645 --- 4.60 -2.5%
BBVA 623 6180 4.68 -0.9%
BMO Capital Markets 630 --- 4.77 1.1%
BNP Paribas 630 --- 4.90 3.8%
Briefing.com 620 --- 4.70 -0.4%
Calyon --- --- 4.62 -2.1%
Castlestone Management LT 668 --- 4.60 -2.5%
CIBC World Markets --- --- 4.80 1.7%
ClearView Economics --- --- 4.70 -0.4%
Commerzbank AG 650 --- 4.40 -6.8%
Credit Suisse 625 --- 4.60 -2.5%
Daiwa Securities America --- --- 4.60 -2.5%
Danske Bank --- --- 4.65 -1.5%
DekaBank --- --- 4.80 1.7%
Desjardins Group 630 --- 4.55 -3.6%
Deutsche Bank Securities --- --- 4.75 0.6%
First Trust Advisors 636 --- 4.57 -3.2%
Fortis --- --- 4.80 1.7%
FTN Financial --- --- 4.70 -0.4%
Goldman, Sachs & Co. --- --- 4.72 0.0%
Helaba 625 --- 4.65 -1.5%
Herrmann Forecasting 637 6099 4.68 -0.9%
High Frequency Economics 670 --- 4.72 0.0%
HSBC Markets 635 6140 4.70 -0.4%
IDEAglobal 630 --- 4.65 -1.5%
IHS Global Insight --- --- 4.52 -4.2%
Informa Global Markets 630 6095 4.70 -0.4%
ING Financial Markets 640 --- 4.63 -1.9%
Insight Economics 650 6150 4.65 -1.5%
Intesa-SanPaulo --- --- 4.75 0.6%
J.P. Morgan Chase 640 --- 4.58 -3.0%
Janney Montgomery Scott L --- --- 4.68 -0.9%
Landesbank Berlin 630 --- 4.45 -5.7%
Landesbank BW --- --- 4.70 -0.4%
Maria Fiorini Ramirez Inc 650 --- --- ---
Merrill Lynch 700 --- 4.82 2.1%
MFC Global Investment Man 615 6100 4.60 -2.5%
Mizuho Securities 650 --- 4.58 -3.0%
Moody’s Economy.com 635 6120 4.65 -1.5%
Morgan Stanley & Co. --- --- 4.70 -0.4%
National Bank Financial --- --- 4.60 -2.5%
Natixis --- --- 4.60 -2.5%
Nomura Securities Intl. --- --- 4.61 -2.3%
PNC Bank --- --- 4.50 -4.7%
Raymond James 630 --- 4.65 -1.5%
RBS Securities Inc. 655 --- 4.65 -1.5%
Ried, Thunberg & Co. 650 6150 4.65 -1.5%
Schneider Foreign Exchang 645 6120 4.37 -7.4%
Scotia Capital 690 6100 4.65 -1.5%
Societe Generale --- --- 4.74 0.4%
Standard Chartered --- --- 4.60 -2.5%
Stone & McCarthy Research 650 --- 4.75 0.6%
TD Securities 650 6100 4.75 0.6%
Tullett Prebon 630 --- 4.65 -1.5%
UBS Securities LLC 630 --- 4.70 -0.4%
Unicredit MIB 640 --- 4.80 1.7%
University of Maryland --- --- 4.74 0.4%
Wachovia Corp. --- --- 4.70 -0.4%
Wells Fargo & Co. 640 --- 4.65 -1.5%
WestLB AG --- --- 4.70 -0.4%
Westpac Banking Co. 610 --- 4.65 -1.5%
Wrightson Associates 650 6150 4.65 -1.5%
================================================================
To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net
Last Updated: April 23, 2009 00:01 EDT
