Sales of previously occupied homes likely to post increase for August, remain weakBy AP
Thursday, September 23, 2010
Ahead of the Bell: August home sales
WASHINGTON — Sales of previously occupied homes likely rose in August, but that’s only because the previous month was the worst in 15 years.
Economists forecast the National Association of Realtors will say home sales rose to a seasonally adjusted annual rate of about 4.1 million, according to a survey by Thomson Reuters. If the report comes in as expected, it would be up about 6 percent from 3.83 million a month earlier.
The report is expected at 10 a.m. EDT on Thursday.
The housing market has stalled ever since government tax credits expired in April. Unemployment remains stuck at 9.6 percent, and many potential buyers worry that they might not have a job to pay the mortgage.
Plus many borrowers can’t sell their current homes because they owe more than their homes are worth. About 11 million U.S. homeowners, or 23 percent of those with a mortgage, are in this position, according to real estate data provider CoreLogic.
With sales weakening, the number of homes lingering on the market has swelled to nearly 4 million. At July’s pace of sales, it would take more than a year to sell all those homes and get them off the market. A healthy level is about six months.
The housing market is widely expected to worsen in the coming months, which are normally a slow time for home sales.
Lending standards remain tight, unemployment is stuck near double digits and foreclosures are expected to remain at extraordinary levels.
Moody’s Analytics projects another 3.3 million homes will be lost to foreclosure or another form of distressed sale over the next four years.
Home prices have risen over the past year after sinking by about a third from their peak four years ago. But most experts expect recent price gains will be short-lived. Many analysts expect home prices to decline by 5 to 10 percent over the next year.
There is evidence that declinees are already happening. The Federal Housing Finance Agency said Wednesday that its index of home prices fell 0.5 percent in July from a month earlier.
The index was down 3.3 percent from the same month last year. It is based on loans owned or guaranteed by mortgage finance companies Fannie Mae and Freddie Mac.
(This version corrects day of week for home price index in 2nd to last paragraph)
Tags: Business And Professional Services, Home Selling, North America, Prices, Residential Real Estate, United States, Washington