Sales of Previously Owned U.S. Homes Probably Climbed in June
Sales of previously owned U.S. homes probably rose in June, a report may show today, a sign the recent pickup in demand will be sustained.
Purchases climbed 1.5 percent last month to a 4.62 million annual rate, matching April as the fastest since January, according to the median forecast of 76 economists surveyed by Bloomberg News. Jobless claims increased last week, another report may show.
Mortgage rates at all-time lows and a drop in prices have made properties more affordable for Americans with access to credit. At the same time, the recovery in the housing market will take time as the economy is slow to create jobs and lingering foreclosures put more homes on the market.
“We’re past the bottom and slowly recovering,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “We might have one more bout of price weakness ahead when the foreclosure pipeline empties later in the year, but investor demand is strong and we’ll absorb that.”
The report from the National Association of Realtors is due at 10 a.m. in Washington. Bloomberg survey estimates ranged from 4.46 million to 4.75 million.
Federal Reserve Chairman Ben S. Bernanke is among those who say the housing market is improving.
Growth in construction and “historically low mortgage rates” are among “modest signs” of a housing recovery, even as some buyers show concern about personal finances and the broader economy and have difficulty meeting lending standards, Bernanke told the Senate Banking Committee this week.
2010 Low
Existing-home sales, which are tabulated when a contract closes, have climbed since reaching a low of 3.39 million at an annual rate in July 2010. In the buildup to the subprime lending collapse and recession, purchases reached a peak of 7.25 million in September 2005.
Borrowing costs remain attractive. The average rate on a 30-year, fixed mortgage declined to 3.56 percent last week, the lowest in data going back to 1972, according to McLean, Virginia-based Freddie Mac.
The pickup in residential real estate may reinforce projections the industry will contribute more to economic growth this year. Housing starts climbed to a 760,000 annual rate in June, the fastest since October 2008, Commerce Department figures showed yesterday.
Another report this week showed confidence among homebuilders climbed in July by the most since September 2002. An index of builder sentiment from the National Association of Home Builders/Wells Fargo increased by 6 points in July to 35.
Builder Shares
Signs the housing market is improving have boosted share prices. The Standard & Poor’s Supercomposite Homebuilding Index (S15HOME), which includes D.R. Horton Inc. and PulteGroup Inc., has climbed 50 percent this year, outpacing a 9.2 percent gain in the broader S&P 500 Index.
At the same time, faster progress may prove difficult without an acceleration in job growth. June concluded the worst quarter for corporate hiring since the first three months of 2010, Labor Department figures showed.
Another report today may show jobless claims rebounded last week after falling in the week ended July 7, which reflected the volatility of applications during the annual auto-plant retooling period. The Labor Department will issue the figures at 8:30 a.m. in Washington.
Foreclosures also are hindering the housing rebound. Initial notices, the start of the process, jumped 6 percent in the second quarter from a year earlier, the first annual increase since 2009, according to RealtyTrac Inc., a real estate data provider in Irvine, California.
February Settlement
The rise may reflect February’s $25 billion settlement among 49 state attorneys general and the five major mortgage servicers for improper and fraudulent paperwork related to foreclosures, according to a Bloomberg Government study.
Home prices are stabilizing. The S&P/Case-Shiller index of property values adjusted for seasonal variations rose 0.7 percent in April, the third straight gain.
“This quarter, we continued to see urgency in customers making the buying decision, and rising prices helped create this urgency,” Jonathan Jaffe, chief operating officer of homebuilder Lennar Corp. (LEN), said on a June 27 earnings call.
Bloomberg Survey
===========================================
Initial Exist
Claims Homes
,000’s Mlns
===========================================
Date of Release 07/19 07/19
Observation Period 14-Jul June
-------------------------------------------
Median 365 4.62
Average 364 4.63
High Forecast 390 4.75
Low Forecast 350 4.46
Number of Participants 47 76
Previous 350 4.55
-------------------------------------------
4CAST 360 4.60
ABN Amro 350 4.62
Action Economics 369 4.65
Ameriprise Financial 373 4.62
Analytical Synthesis --- 4.66
Banca Aletti 360 4.60
Bantleon Bank AG --- 4.70
Barclays 370 4.58
BBVA 375 4.60
BMO Capital Markets --- 4.70
BNP Paribas 365 4.70
BofA Merrill Lynch 360 4.65
Briefing.com 360 4.65
Capital Economics --- 4.70
CIBC World Markets --- 4.68
Citi 370 4.55
ClearView Economics --- 4.60
Comerica --- 4.60
Commerzbank AG 360 4.75
Credit Agricole CIB --- 4.60
Credit Suisse 360 4.60
Daiwa Securities America --- 4.63
Danske Bank --- 4.58
Desjardins Group 365 4.65
Deutsche Bank Securities 365 4.60
DZ Bank --- 4.55
Exane --- 4.63
Fact & Opinion Economics 365 4.60
First Trust Advisors 365 4.60
FTN Financial --- 4.46
Goldman, Sachs & Co. --- 4.60
Helaba 365 4.70
High Frequency Economics 355 4.62
HSBC Markets --- 4.62
Hugh Johnson Advisors 360 4.60
IDEAglobal 355 4.70
IHS Global Insight 390 4.62
Informa Global Markets 365 4.60
ING Financial Markets 374 4.63
Insight Economics 370 4.65
Intesa Sanpaulo --- 4.70
J.P. Morgan Chase 365 4.65
Janney Montgomery Scott --- 4.70
Jefferies & Co. 360 4.62
John Hancock Financial 374 4.61
Landesbank Berlin 360 4.60
Landesbank BW --- 4.65
Lloyds Bank 355 4.65
Maria Fiorini Ramirez --- 4.70
Market Securities --- 4.58
MET Capital Advisors --- 4.53
Mizuho Securities 350 4.60
Moody’s Analytics 363 4.59
Morgan Stanley & Co. 360 4.64
National Bank Financial --- 4.60
Natixis --- 4.57
Nomura Securities --- 4.69
Nord/LB 360 ---
OSK Group/DMG --- 4.65
Pierpont Securities 358 4.70
PNC Bank --- 4.65
Raiffeisenbank International --- 4.65
Raymond James --- 4.64
RBC Capital Markets 365 4.60
RBS Securities 360 4.65
Scotiabank 355 4.60
SMBC Nikko Securities --- 4.67
Societe Generale 375 4.62
Southern Polytechnic State 356 ---
Standard Chartered 365 4.62
Stone & McCarthy Research 365 4.62
TD Securities 375 4.70
UBS 365 4.60
UniCredit Research --- 4.75
University of Maryland 370 4.62
Wells Fargo & Co. --- 4.73
Westpac Banking Co. 360 4.60
Wrightson ICAP 360 4.65
===========================================
To contact the reporter on this story: Michelle Jamrisko in Washington at mjamrisko@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
Sales of Previously Owned U.S. Homes Probably Climbed in June
Andrew Harrer/Bloomberg
A Realtor places an open house sign outside a five-bedroom row house for sale in the Logan Circle neighborhood of Washington.
A Realtor places an open house sign outside a five-bedroom row house for sale in the Logan Circle neighborhood of Washington. Photographer: Andrew Harrer/Bloomberg
July 18 (Bloomberg) -- Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ, talks about June U.S. housing starts data released today and outlook for the economy. Starts rose 6.9 percent last month to a 760,000 annual pace after a revised 711,000 rate in May that was faster than initially estimated, the Commerce Department reported today in Washington. (Source: Bloomberg)
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