Ahead of the Bell: US New-Home Sales
WASHINGTON (AP) — Americans likely bought more new homes in December, a sign the housing recovery ended 2012 with momentum.
Economists are predicting that sales rose to a seasonally adjusted annual rate of 383,000, according to a survey by FactSet. The Commerce Department will release the report at 10 a.m. EST Friday.
In November, sales increased to a rate of 377,000. That was the fastest pace in more than 2½ years.
And sales had increased 15.3 percent over the past year, although sales remain well below the 700,000 that economists consider healthy.
The housing market began to recover in 2012, helped by stable job gains and record-low mortgage rates.
Sales of previously occupied homes rose to 4.65 million last year, the most in five years. Home prices rose steadily and appear to be sustainable. And builders finished their best year for residential construction since 2008, shortly after the housing market began to collapse.
To be sure, the increases are coming off of depressed levels and housing has a long way back to a full recovery. But most economists expect the recovery will strengthen in 2013.
One reason is more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
And the supply of both newly built and previously occupied homes for sale have dwindled. Fewer homes for sale have helped drive prices higher and made many markets more competitive.
Though new homes represent less than 20 percent of the housing sales market, they have an outside impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenues, according to data from the National Association of Homebuilders.
The gains in home building helped boost construction hiring in December by 30,000 jobs, the most in 15 months.
Still, the number of first-time buyers remains low, which has limited sales. Many are unable to qualify for historically low mortgage rates because banks have adopted tighter credit standards and are requiring larger down payments.