Sales of existing homes climbed in July from an eight-month low, adding to signs U.S. housing may pick up in the second half.
Purchases of previously owned houses, tabulated when a contract closes, increased 2.3 percent to a 4.47 million annual rate, figures from the National Association of Realtors showed today in Washington. The data were posted on the group’s website ahead of the usual 10 a.m. release time. The median forecast of 73 economists surveyed by Bloomberg called for a rise to a 4.51 million rate.
Buoyed by cheaper properties and record-low mortgage costs, demand for real estate is bolstering the industry that helped trigger the recession. Minutes of the Federal Reserve’s latest meeting, due later today, will be a reminder that policy makers are monitoring data such as housing to determine whether the world’s largest economy needs more stimulus.
“This is a continuation of good news, but we’ve got to continue to build momentum,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who forecast sales would rise to 4.46 million. “The home sales numbers are going to continue to go higher. As much as the employment numbers aren’t great, they aren’t horrible either, so those that have jobs are feeling a little bit better about their situations.”
Stocks were little changed, after the Standard & Poor’s 500 Index briefly topped a four-year high yesterday, as Japan’s exports slid and Greece sought more time on changes while investors awaited the Fed minutes. The S&P 500 Index fell less than 0.1 percent to 1,412.4 at 10:37 a.m. in New York.
Estimates in the Bloomberg survey ranged from 4.3 million to 4.8 million. The prior month’s pace was unrevised at 4.37 million, the lowest since October.
The median price of an existing home jumped 9.4 percent from a year earlier, the biggest 12-month gain since January 2006, to $187,300 from $171,200 in July 2011, today’s report showed.
Compared with a year earlier, purchases increased 11 percent before adjusting for seasonal variations.
The number of previously owned homes on the market climbed 1.3 percent to 2.4 million. At the current sales pace, it would take 6.4 months to sell those houses compared with 6.5 months at the end of the prior month. The group said it considers 6 months’ supply “normal.”
Purchases increased in three of four regions, led by a 7.4 percent gain in the Northeast. Purchases in the West were unchanged.
Minutes of the Fed’s latest meeting, due later today, will be a reminder that policy makers are monitoring data such as housing to determine whether the world’s largest economy needs more stimulus.
The central bank has said it will “closely monitor” economic data and financial developments, according to a statement after its July 31-Aug. 1 gathering, at which policy makers determined they “will provide additional accommodation as needed” to accelerate the expansion.
“Despite some further signs of improvement, the housing sector remains depressed,” the Fed statement also said.
Of all purchases, cash transactions accounted for about 27 percent, down from 29 percent in June. First-time buyers made up 34 percent of the total, up from 32 percent in July 2011. Under “normal conditions,” entry-level purchasers account for about 40 percent, the Realtors group said.