New-home sales climbed to a 380,000 annual rate in November, the most since April 2010, according to the median forecast of 60 economists surveyed by Bloomberg before Dec. 27 figures from the Commerce Department. House prices in 20 cities rose 4 percent in the 12 months ended October, the best year- over-year performance since June 2010, other figures may show.
“We’re going to see large gains in virtually all of the housing measures next year,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, a subsidiary of the largest mortgage lender in the U.S. “Job growth and the steady decline in the unemployment rate means that more and more workers feel confident about their own economic prospects and they’re willing to move forward with major commitments like buying a home and buying an automobile.”
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“Consumers are beginning to focus a little bit on the fiscal cliff and likelihood that there’s not a good outcome there,” Vitner said. Shares Fall
Stocks sank at the end of last week after House Republican leaders canceled a vote on higher taxes for top earners, sending budget talks deeper into turmoil. The House and Senate don’t plan to return until Dec. 27 to address the end-of-year budget issues. That will give them less than a week to reach agreement to avert the more than $600 billion tax increases and spending cuts set to take effect in January.
The Standard & Poor’s 500 Index fell 0.9 percent to 1,430.15 at the close on Dec. 21 in New York. The gauge climbed 1.2 percent for the week.
Record-low borrowing costs are among reasons housing has been able to rise above the budget turmoil so far. The average rate on a 30-year, fixed mortgage was 3.37 percent last week, hovering near the 3.31 percent reached a month earlier that was the lowest in data going back to 1972, according to McLean, Virginia-based Freddie Mac.
“While it has been a few years in the making, housing is becoming a bright spot for the economy and the industry is once again positioned to play its historical role of being a job creator and leading the national economy into a full recovery,” Jeffrey Mezger, president and chief executive officer of Los Angeles-based KB Home, said on a Dec. 20 earnings call.
Demand is being spurred by “increased urgency to take advantage of incredible affordability as prices are now on the rise,” he said. Homeownership is cheaper than rent in most markets and “household formation is once again growing as millennials are now starting to leave their parents’ homes and move out on their own as the economy improves.”
S&P/Case-Shiller’s report on October home values in 20 cities is due Dec. 26. The projected gain for the month would follow a 3 percent increase in the year through September.
A report on Dec. 28 from the National Association of Realtors will show pending sales of existing homes climbed 1 percent from the previous month, according to the survey median.
Less joblessness is helping spur demand for housing. The unemployment rate fell to a four-year low of 7.7 percent in November, according to Labor Department figures. It was at 8.7 percent a year earlier and peaked at 10 percent in October 2009, four months after the recession ended.
Payrolls climbed by 146,000 workers in November, near an average 151,450 for 2012 that’s little changed from the previous year’s 153,330.
Measures of consumer confidence are showing mixed results as growing concern about the fiscal outlook is counterbalanced by the decrease in unemployment, gains in housing and a drop in gasoline prices.
Figures due Dec. 27 from the Conference Board will show its confidence index fell to 70 in December from a more than four- year high of 73.7 the prior month, according median forecast of economists surveyed.
Bloomberg’s Consumer Comfort Index climbed to an eight- month high earlier this month, while the Thomson Reuters/University of Michigan consumer sentiment index decreased to a five-month low in December, according to data released last week.
Bloomberg Survey ================================================================ Release Period Prior Median Indicator Date Value Forecast ================================================================ Case Shiller Monthly MOM 12/26 Oct. 0.4% 0.5% Case Shiller Monthly YOY 12/26 Oct. 3.0% 4.0% Initial Claims ,000’s 12/27 15-Dec 361 360 Cont. Claims ,000’s 12/27 8-Dec 3225 3200 Consumer Conf Index 12/27 Dec. 73.7 70.0 New Home Sales ,000’s 12/27 Nov. 368 380 New Home Sales MOM% 12/27 Nov. -0.3% 3.3% Chicago PM Index 12/28 Dec. 50.4 51.0 Pending Homes MOM% 12/28 Nov. 5.2% 1.0% Pending Homes YOY% 12/28 Nov. 18.0% 10.6% ================================================================
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By Michelle Jamrisko
Taken from: http://www.businessweek.com/news/2012-12-23/home-sales-values-probably-increased-u-dot-s-dot-economy-preview