Ahead of the Bell: US Home Sales
WASHINGTON (AP) — Sales of previously occupied U.S. homes likely rose last month to their highest level in more than 2½ years, the latest sign of steady improvement in the housing market.
Economists forecast that November sales reached a seasonally adjusted annual rate of 4.86 million homes, according to a survey by FactSet. That would be up 1.5 percent from 4.79 million in October. Home sales are on pace for their best year since 2007.
The National Association of Realtors will release the report at 10 a.m. EST Thursday.
Sales are about 11 percent higher than a year ago. But they remain below the roughly 5.5 million that economists consider consistent with a healthy market.
In October, sales of previously occupied homes rose 2.1 percent. But sales were still lower than in August, when they soared nearly 8 percent to 4.83 million.
One reason economists expect an increase in November: The number of contracts signed to buy homes jumped in October to the highest level in nearly six years. Increases in signed contracts are usually followed by higher sales one or two months later.
Modest job gains and mortgage rates near record lows have spurred more sales. Prices are rising, which encourages more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market if they feel confident they can sell at a good price.
One reason for the rebound is that the excess supply of homes that built up during the housing bubble has finally thinned out. The number of previously occupied homes available for sale fell to a 10-year low in October. The supply of new homes is also near its lowest level since 1963.
At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
These trends have supported a steady recovery in housing. Builder confidence rose in December for a seventh straight month to the highest level in more than 6½ years, according to a survey released Tuesday by the National Association of Home Builders/Wells Fargo.
The pace of home construction slipped in November, but it was still nearly 22 percent higher than a year earlier. Builders are on track this year to start work on the most homes in four years.
Economists note that the increase in building should lead to more construction jobs, though it hasn't yet done so. That could mean more construction hiring is coming.