By Chris Cermak
WASHINGTON (MNI) – U.S. housing sales and construction data to be
released this week are expected to show a minor rebound in March, but
perhaps not enough to overcome one of the market’s worst months on
record in February.
Housing starts likely rose to 525,000, according to a survey of
economists by Market News International, after plummeting 22.5% in
February to 479,000, the second-lowest number on record.
Sales of existing homes in March were forecast at 5 million, up
from 4.88 million the previous month, according to MNI’s survey. Pending
home sales, a leading indicator of the March sales numbers from the
National Association of Realtors, rose 2.1% to 90.8 in February.
The housing market continues to lag the overall recovery, and
economists are not expecting a significant rebound even as the spring
construction season begins. Foreclosures and tight lending conditions
have kept home prices near record lows, leaving existing mortgage
holders underwater and discouraging potential new buyers.
Kevin Harris, chief economist at Informa Global Markets in New
York, said he does not expect a more noticeable pickup in home sales or
construction until there is a stronger rebound in the still-struggling
labor market.
“We’re sideways at the bottom at this point,” Harris said in an
interview. Still, Harris said March’s starts numbers could come in
slightly on the upside of forecasts, noting that February’s weak numbers
were led by a nearly 50% drop in the more volatile multi-family homes.
Home builders also have yet to show signs of hope as foreclosures
have flooded existing inventories and pushed demand for new homes to
all-time lows. New home sales reached a record low of 250,000 in
February, according to the Commerce Department.
A monthly survey of the construction industry released Monday by
the National Association of Home Builders fell to 16 from 17 the
previous month. A reading above 50 indicates that a majority of builders
are optimistic. The index’s outlook for single-family home sales in the
coming six months also dropped to 23 in April from 26 in March.
The housing starts report will be released at 8:30 a.m. ET Tuesday
by the Commerce Department. Existing home sales will be issued Wednesday
at 10 a.m. ET by the National Association of Realtors.
— Chris Cermak is a reporter for Need to Know News in Washington
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: MAUDS$,M$U$$$]