Housing starts fell in December to a 529,000 annual rate, the lowest level since October 2009, Commerce Department figures showed last week. Photographer: Tim Boyle/Bloomberg
Jan. 25 (Bloomberg) — Nicolas Retsinas, director emeritus of the Joint Center for Housing Studies at Harvard University, talks about the outlook for the U.S. housing market and mortgage foreclosures. U.S. home prices have reached a bottom and may be set to rise in the first half as buyers take advantage of increased affordability, said Karl Case, the economist who co-founded the S&P/Case-Shiller home price index. Retsinas talks with Pimm Fox on Bloomberg Television’s “Surveillance Midday.” (Source: Bloomberg)
Jan. 5 (Bloomberg) — Martin Connor, chief financial officer at Toll Brothers Inc., talks about the outlook for the U.S. housing market. Connor also discusses markets in Las Vegas, Florida and California. He talks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)
A cement mason works on the foundation of a new home under construction in Cary, North Carolina. Photographer: Jim R. Bounds/Bloomberg
Purchases of new houses in the U.S. probably rose in December for a second month as the industry struggled to stabilize near record lows, economists said before a report today.
Sales, tabulated when contracts are signed, climbed 3.5 percent to 300,000 annual pace, according to the median estimate in a Bloomberg News survey of 79 economists. The 274,000 rate in August was the weakest in data going back to 1963.
Builders may keep facing competition from a growing glut of foreclosed homes that is depressing prices. The lack of a sustained housing rebound and unemployment above 9 percent are among reasons Federal Reserve policy makers today are expected to press on with a second round of stimulus that will pump $600 billion into financial markets by June.
“It’s very hard for new-home sales to compete when buyers are getting good bargains on distressed houses,” said Michelle Meyer, senior U.S. economist with Bank of America Merrill Lynch Global Research in New York. “Housing is going to stand out as the weak spot in the economy for a while. The Fed remains concerned about it.”
The Commerce Department report is due at 10 a.m. in Washington. Economists’ forecasts ranged from 270,000 to 315,000, after a 290,000 rate in November.
Previously owned home purchases jumped more than forecast in December as buyers tried to lock in low mortgage rates before the economic recovery pushed borrowing costs up even more, figures from the National Association of Realtors showed last week. Existing house purchases are calculated when a contract closes.
Leading Indicator
New-home sales are considered a more timely barometer than purchases of previously owned homes, which account for about 90 percent of the housing market.
Housing demand see-sawed last year, reflecting a boost from a homebuyer tax incentive of as much as $8,000 that gave way to a plunge in sales by mid-2010 after the credit ended.
With sales yet to show sustained strength, builders have cut back on the new-home supply. Housing starts fell in December to a 529,000 annual rate, the lowest level since October 2009, Commerce Department figures showed last week.
An unemployment rate that is forecast to average more than 9 percent again this year signals some homeowners will keep having trouble meeting mortgage payments, leading to an increase in distressed properties. The number of homes getting a foreclosure filing will rise about 20 percent this year, reaching a peak for the housing crisis, said RealtyTrac Inc., an Irvine, California-based data seller.
Prices Fall
Prices remain under pressure, hurting homeowner equity while at the same time improving affordability. The S&P/Case- Shiller index of home values in 20 cities fell 1.6 percent in November from the prior year, the biggest 12-month decrease since December 2009, a report from the group showed yesterday.
The S&P Supercomposite Homebuilder Index, which includes Toll Brothers Inc. and Lennar Corp., rose 2.3 percent in 2010, compared with a 13 percent gain in the S&P 500 Index.
Horsham, Pennsylvania-based Toll, the largest U.S. luxury- home builder, is among companies concerned about foreclosures in markets like Las Vegas and Phoenix, even as it is “optimistic” about the upcoming spring selling season, according to Martin Connor, chief financial officer.
“I don’t think it’s quite turned the corner yet,” Connor said in a Bloomberg Television interview on Jan. 5, referring to the housing industry. Still, general positive economic news including an increase in retail sales “bodes well for the housing market,” he said.
While signs such as improving consumer confidence indicate the world’s largest economy is gaining speed, Fed Chairman Ben S. Bernanke and his fellow policy makers will likely complete the second round of quantitative easing to keep borrowing costs low and spur growth. Their statement is due at around 2:15 p.m. Washington time.
Bloomberg Survey =========================================== New Home New Home Sales Sales ,000’s MOM% =========================================== Date of Release 01/26 01/26 Observation Period Dec. Dec. ------------------------------------------- Median 300 3.5% Average 297 2.5% High Forecast 315 8.6% Low Forecast 270 -6.9% Number of Participants 79 79 Previous 290 5.5% ------------------------------------------- 4CAST Ltd. 295 1.7% Action Economics 300 3.5% Aletti Gestielle 300 3.5% Ameriprise Financial 300 3.5% Banesto 298 2.8% Bank of Tokyo- Mitsubishi 300 3.5% Bantleon Bank AG 310 6.9% Barclays Capital 295 1.7% BBVA 310 6.9% BMO Capital Markets 305 5.2% BNP Paribas 300 3.5% BofA Merrill Lynch Research 295 1.7% Briefing.com 280 -3.5% Capital Economics 310 6.9% CIBC World Markets 290 0.0% Citi 300 3.5% ClearView Economics 300 3.5% Commerzbank AG 300 3.5% Credit Agricole CIB 300 3.5% Credit Suisse 300 3.5% Daiwa Securities America 300 3.5% Danske Bank 285 -1.7% DekaBank 300 3.5% Desjardins Group 290 0.0% Deutsche Bank Securities 285 -1.7% DZ Bank 310 6.9% Fact & Opinion Economics 270 -6.9% First Trust Advisors 292 0.7% FTN Financial 300 3.5% Goldman, Sachs & Co. 290 0.0% Helaba 310 6.9% High Frequency Economics 290 0.0% Horizon Investments 290 0.0% HSBC Markets 305 5.2% Hugh Johnson Advisors 290 0.0% IDEAglobal 300 3.5% IHS Global Insight 298 2.8% Informa Global Markets 305 5.2% ING Financial Markets 310 6.9% Insight Economics 305 5.2% Intesa-SanPaulo 300 3.5% J.P. Morgan Chase 290 0.0% Janney Montgomery Scott 295 1.7% Jefferies & Co. 275 -5.2% Landesbank Berlin 300 3.5% Landesbank BW 305 5.2% Manulife Asset Management 305 5.2% Maria Fiorini Ramirez 295 1.7% MET Capital Advisors 285 -1.7% MF Global 280 -3.5% Mizuho Securities 287 -1.0% Moody’s Analytics 306 5.5% Morgan Keegan & Co. 287 -1.0% Morgan Stanley & Co. 300 3.5% National Bank Financial 305 5.2% Natixis 300 3.5% Nomura Securities Intl. 300 3.5% OSK Group/DMG 305 5.2% Pierian Capital 315 8.6% Pierpont Securities LLC 275 -5.2% PineBridge Investments 287 -1.0% PNC Bank 310 6.9% Raymond James 300 3.5% RBC Capital Markets 305 5.2% RBS Securities Inc. 300 3.5% Scotia Capital 280 -3.5% Societe Generale 276 -4.8% Standard Chartered 300 3.5% State Street Global Markets 296 2.1% Stone & McCarthy Research 300 3.5% TD Securities 310 6.9% Thomson Reuters/IFR 295 1.7% UBS 310 6.9% UniCredit Research 300 3.5% University of Maryland 300 3.5% Wells Fargo & Co. 304 4.8% WestLB AG 300 3.5% Westpac Banking Co. 281 -3.0% Wrightson ICAP 310 6.9% ===========================================To contact the reporters 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
Sales of New Homes in U.S. Likely Rose for Second Month –
Leave a reply
via bloomberg.com