Pending U.S. Sales of Existing Homes Increase
The number of contracts to purchase previously owned homes in the U.S. increased for a second month, a sign the housing market is beginning to stabilize.
The National Association of Realtors’ index of pending home resales rose 4.3 percent in August, more than forecast, after a revised 4.5 percent gain the prior month that was less than initially estimated. Compared with the same month a year ago, pending sales were down 18.4 percent.
Home sales have steadied after plunging in the months following the expiration of a housing tax credit. Unemployment projected to stay above 9 percent through 2011 may depress demand in coming months even as record-low mortgage rates and lower prices make homes more affordable.
Housing is “bouncing along the bottom, unable to gain any traction, but with little reason to believe it’s going to go any lower,” said Eric Green, chief market economist at TD Securities Inc. in New York. “All of the froth has been eliminated from the bubble and all we need now is for confidence to turn higher and job growth to accelerate.”
Economists forecast pending home sales would increase 2.5 percent, according to the median of 39 projections in a Bloomberg News survey. Estimates ranged from a drop of 2 percent to an increase of 5.6 percent.
Separate figures from the Commerce Department showed factory orders declined 0.5 percent in August because of a decrease in bookings for aircraft. Orders for business equipment increased, indicating companies are investing.
Source: AP, Bloomberg Business Week