Ahead of the Bell: US home sales
WASHINGTON (AP) — The National Association of Realtors reports on sales of existing homes in January. The report is scheduled for release at 10 a.m. Eastern Friday.
SALES SLOW: Economists forecast that re-sales fell to an annual rate of 4.77 million last month, according to a survey by FactSet. That would be a 2.1 percent decline from the December sales rate of 4.87 million.
BLAME COLD WEATHER: Freezing temperatures and snowstorms have caused most housing activity to slip this winter.
Pending sales plunged in December, the Realtors said in a recent report. Home building dipped 16 percent in January from December, the Commerce Department said this week. The weather has kept would-be buyers from venturing to open houses, while construction crews have endured work stoppages.
PREVIOUS MOMENTUM: Sales of previously occupied homes totaled 5.1 million in 2013, the Realtors said last month. That's the highest in seven years, but it's still below the 5.5 million that is consistent with a healthy housing market.
Over the summer, re-sales reached a pace of 5.39 million. But sales began to slow in September as the costs of buying a home rose because of higher prices and mortgage rates.
The average interest rate on a 30-year mortgage rose to 4.33 percent this week from 4.28 percent the previous week. Rates surged about 1.25 percentage points from May through September, peaking at 4.6 percent. That increase occurred after Federal Reserve Chairman Ben Bernanke indicated that the Fed would start to slow its bond-buying program before the end of the year.
The Fed has reduced its monthly bond purchases from $85 billion to $65 billion in its last two policy meetings. The program is intended to push down longer-term interest rates and encourage more borrowing, spending and hiring.