Ahead of the Bell: September US Home Sales
WASHINGTON -- Sales of previously occupied U.S. homes likely slipped last month from a two-year high reached in August, the latest sign that the recovery in housing is slow and uneven.
Economists forecast that sales dropped 1.7 percent in September to a seasonally adjusted annual rate of 4.74 million units, according to a survey by FactSet. The National Association of Realtors will release the report at 10 a.m. Eastern time Friday.
In August, sales of previously occupied homes jumped 7.8 percent to 4.82 million, the highest since May 2010, when sales were aided by a federal home-buying tax credit.
But the number of contracts signed to buy homes fell that month, the Realtors' group said. Decreases in signed contracts are usually followed by lower sales one or two months later.
Existing home sales have also been held back by a low supply of homes available for sale. There were 2.47 million homes available in August. It would take just over six months to exhaust that supply at the current sales pace. That's the typical pace in a healthy market.
And a recent report from data provider CoreLogic showed that the so-called "shadow" inventory of homes fell 10 percent in July compared with a year ago. The shadow inventory consists of homes with seriously delinquent mortgages or that are in the foreclosure process and that eventually will be put on sale.
Plenty of home buyers, particularly first-time buyers, are having difficulty qualifying for a mortgage or can't afford the larger down payments that many lenders want.
Still, most economists are confident that the housing market is recovering after its nearly six-year slump. Home prices are rising, though they remain lower than they were six years ago. And mortgage rates have been under 4 percent all year.
Builders broke ground on new homes and apartments at the fastest pace in more than four years last month. The jump could help boost the economy and hiring. The number of homes started jumped 15 percent in September.
Builders are more confident because they are seeing more prospective buyers visit properties. The National Association of Home Builders/Wells Fargo builder sentiment index, released Tuesday, inched up to its highest level in more than six years in October.
There are also signs that the economy is improving. Retail sales rose at a solid pace in September, reflecting growing confidence among consumers. A measure of consumer confidence released last week reached a five-year high.