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Sales of Previously Owned U.S. Homes Probably Eased in January

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Sales of Previously Owned U.S. Homes Probably Eased in January
Existing-home sales, tabulated when a contract closes, have recovered since reaching a 13-year low of 4.11 million in 2008. Photographer: David Paul Morris/Bloomberg

Feb. 21 (Bloomberg) -- Sales of previously owned U.S. homes probably eased in January, reflecting a pause in momentum for the industry coming off its best year since 2007, economists said before a report today.

Purchases fell 0.8 percent to a 4.9 million annualized rate last month from December’s 4.94 million, according to the median forecast of 79 economists surveyed by Bloomberg. Other data may show consumer prices were contained in January and a measure of the economic outlook for the next three to six months climbed.

A sustained pickup in housing will depend on faster progress in the labor market, fewer foreclosures and easier access to credit. Near record-low mortgage costs and the prospect of firming prices may induce buyers to return to the market at a time the available supply of homes is shrinking, posing a potential restraint on sales.

“Housing is still very much in recovery,” said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Florida. “It could be a lot faster. We do need to see job gains continuing. Banks are a little more willing to lend, but it’s still a very gradual process.”

The Realtors’ report is due at 10 a.m. in Washington. Bloomberg survey estimates ranged from 4.7 million to 5.1 million.

At 8:30 a.m., Labor Department figures may show the consumer-price gauge advanced 0.1 percent in January, the first increase in three months, according to the Bloomberg survey median. The core index, which excludes volatile food and energy expenses, may have climbed 0.2 percent after a 0.1 percent gain. Compared with January 2012, the core rose 1.8 percent, the smallest year-over-year increase since July 2011, the survey median showed.

Jobless Claims

Applications for jobless benefits may have climbed for the first time in three weeks, economists forecast before another 8:30 a.m. report from the Labor Department. The median estimate of 355,000 claims for last week compares with 367,000 at the end of last year and shows some progress in the job market.

In a sign manufacturing is stabilizing, the Federal Reserve Bank of Philadelphia’s general economic index may have rebounded to 1.1 in February from minus 5.8 last month, the Bloomberg survey median showed. The report is due at 10 a.m.

At the same time, figures from the Conference Board may show its gauge of U.S. leading indicators climbed 0.2 percent in January, according to economists surveyed by Bloomberg. The gain, following a 0.5 percent increase in December, signals the world’s largest economy will keep expanding this year.

Last Year

Existing-home sales, tabulated when a contract closes, have recovered since reaching a 13-year low of 4.11 million in 2008. The market peaked at a record 7.08 million in 2005. A total of 4.65 million previously owned houses were sold last year, the most since 2007 and up 9.2 percent from 2011. Resales accounted for about 93 percent of the residential market in 2012.

Company results indicate the improvement in residential real estate will continue. PulteGroup, Lennar Corp. and D.R. Horton Inc., the top three U.S. homebuilders by market value, said orders rose in the most recently reported quarter.

A report yesterday from the Commerce Department showed single-family home starts increased in January to the highest level since July 2008. Total housing starts dropped to an 890,000 pace, restrained by a drop in construction of multifamily dwellings.

This year may show “at least 950,000 housing starts, probably closer to 1 million, based upon what we have seen so far in terms of order rates as well as permitting activity,” Gregory Hayes, chief financial officer at United Technologies Corp., said at a Feb. 7 conference. The Hartford, Connecticut-based company’s businesses include Carrier air conditioners and Otis elevators.

‘Good Growth’

“If housing starts really do pick up as we expect and the economy picks up as we expect, I think what you’ll see is pretty good growth in the residential business” that includes Carrier air conditioners, Hayes said.

The Standard & Poor’s Supercomposite Homebuilding Index has surged 61 percent in the 12 months to Feb. 20, outpacing an 11 percent gain in the broader S&P 500.

Buying a property is more affordable for those who can get credit. The average fixed rate on a 30-year loan held at 3.53 percent in the week ended Feb. 14, down from 3.87 percent a year ago, according to McLean, Virginia-based Freddie Mac.

Delinquencies, while still a hurdle to the industry’s rebound, continue to wane. Foreclosure filings fell 28 percent in January from a year earlier to the lowest level since April 2007, as a new California law slowed first-time defaults in the most-populous state, according to RealtyTrac, an Irvine, California-based data provider.

                       Bloomberg Survey

================================================================
                               CPI     Core  Initial    Exist
                                        CPI   Claims    Homes
                              MOM%     MOM%   ,000’s     Mlns
================================================================

Date of Release              02/21    02/21    02/21    02/21
Observation Period            Jan.     Jan.   16-Feb     Jan.
----------------------------------------------------------------
Median                        0.1%     0.2%      355     4.90
Average                       0.1%     0.2%      354     4.91
High Forecast                 0.4%     0.2%      375     5.10
Low Forecast                 -0.1%     0.1%      330     4.70
Number of Participants          84       82       48       79
Previous                      0.0%     0.1%      341     4.94
----------------------------------------------------------------
4CAST Ltd.                    0.1%     0.2%      360     4.95
ABN Amro Inc.                 0.2%     0.2%      360     4.94
Action Economics              0.1%     0.2%      360     4.98
Ameriprise Financial Inc      0.2%     0.1%     ---      4.95
Banca Aletti & C spa          0.0%     0.1%      348     5.05
Bank of the West              0.1%     0.2%     ---      4.85
Bank of Tokyo- Mitsubishi     0.3%     0.2%      350     4.90
Banorte-IXE                   0.1%     0.2%     ---      ---
Bantleon Bank AG              0.1%     0.2%     ---      4.89
Barclays                      0.0%     0.2%      355     4.90
Bayerische Landesbank         0.2%     0.1%     ---      ---
BBVA                          0.2%     0.2%      350     4.96
BMO Capital Markets           0.0%     0.2%      358     4.83
BNP Paribas                   0.0%     0.2%      365     4.90
BofA Merrill Lynch Resear     0.1%     0.1%      350     4.85
Capital Economics             0.0%     0.1%     ---      4.90
CIBC World Markets            0.1%     0.2%     ---      4.80
Citi                          0.1%     0.2%      345     4.95
ClearView Economics           0.2%     0.1%     ---      4.95
Comerica Inc                  0.1%     0.1%     ---      ---
Commerzbank AG                0.0%     0.2%      340     4.90
Credit Agricole CIB           0.0%     0.1%     ---      5.00
Credit Suisse                 0.1%     0.2%      340     4.85
Daiwa Securities America      0.1%     0.2%     ---      5.00
Danske Bank A/S               0.0%     0.1%     ---      4.91
DekaBank                      0.0%     0.2%     ---      4.80
Desjardins Group              0.0%     0.2%      358     4.92
Deutsche Bank Securities      0.1%     0.2%      350     4.90
Deutsche Postbank AG          0.2%     0.1%     ---      ---
Fact & Opinion Economics      0.1%     0.2%      366     4.90
First Trust Advisors          0.1%     0.1%      352     4.94
FTN Financial                 0.1%     0.2%     ---      4.90
Goldman, Sachs & Co.          0.1%     0.2%     ---      4.84
Hammer Partners SA            0.1%     0.2%     ---      4.94
Helaba                        0.0%     0.2%     ---      4.90
High Frequency Economics      0.1%     0.2%      350     4.85
HSBC Markets                  0.1%     0.2%      348     4.97
Hugh Johnson Advisors         0.1%     0.1%      350     4.88
IDEAglobal                    0.3%     0.2%      350     4.90
IHS Global Insight            0.1%     0.2%      360     4.80
Informa Global Markets        0.2%     0.2%      360     4.85
ING Financial Markets         0.2%     0.2%      350     4.79
Intesa Sanpaolo               0.1%     0.2%     ---      4.90
J.P. Morgan Chase             0.0%     0.2%      350     4.90
Janney Montgomery Scott L     0.2%     0.1%     ---      4.84
Jefferies & Co.               0.1%     0.1%      360     4.90
John Hancock Financial        0.2%     0.2%      346     5.03
Landesbank Berlin             0.1%     0.1%     ---      4.85
Landesbank BW                 0.1%     0.1%     ---      4.95
Lloyds Bank Wbm               0.2%     0.2%      355     5.03
Maria Fiorini Ramirez Inc     0.1%     0.2%      345     4.88
Market Securities             0.1%     0.2%     ---      5.04
MET Capital Advisors          0.0%     ---      ---      4.95
Modal Asset                   ---      ---      ---      5.04
Moody’s Analytics             0.1%     0.1%      357     4.84
Morgan Stanley & Co.          0.1%     0.2%     ---      4.85
National Bank Financial       0.1%     0.2%     ---      4.85
Natixis                       0.2%     0.2%     ---      4.87
Nomura Securities Intl.       0.1%     0.2%     ---      5.04
Nord/LB                       0.2%     0.2%      350     ---
OSK Group/DMG                 0.0%     0.1%     ---      4.95
Oxford Economics Ltd          0.3%     0.1%      355     4.89
Pantheon Macroeconomic        0.2%     0.2%      350     4.70
Pierpont Securities LLC       0.1%     0.2%      360     4.95
PineBridge Investments        0.1%     0.2%      360     4.99
PNC Bank                      0.1%     0.2%     ---      4.85
Prestige Economics            ---      ---      ---      5.05
Raiffeisenbank Internatio     0.1%     0.2%     ---      4.80
Raymond James                 0.2%     0.1%      350     4.95
RBC Capital Markets           0.1%     0.2%      360     4.70
RBS Securities Inc.           0.0%     0.1%     ---      ---
Regions Financial Corp        0.1%     0.2%     ---      4.88
Santander Asset Mgmt          ---      ---      ---      4.93
Scotiabank                    0.2%     0.2%      370     4.85
SMBC Nikko Securities         0.2%     0.2%     ---      5.00
Societe Generale              0.1%     0.2%      330     5.10
Southbay Research             ---      ---       356     ---
Southern Polytechnic Stat     0.4%     0.1%      360     ---
Standard Chartered Bank       0.1%     0.2%      350     4.88
Stone & McCarthy Research     0.3%     0.1%      360     4.80
TD Securities                 0.1%     0.2%      355     4.95
UBS                           0.1%     0.2%      335     5.01
UniCredit Research            0.2%     0.2%     ---      4.80
Union Investment              0.2%     0.2%     ---      ---
University of Maryland        0.1%     0.2%      360     4.83
Wells Fargo & Co.             0.2%     0.2%     ---      4.95
Westpac Banking Co.           0.1%     ---       365     4.89
Wrightson ICAP               -0.1%     0.1%      375     4.85
================================================================

To contact the report on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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