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  • jfdanyko jfdanyko Jul 19, 2009 3:07 PM Flag

    Home Resales, Leading Index Likely to Have Rose: U.S. Economy Preview

    Home Resales, Leading Index Probably Rose: U.S. Economy Preview

    Edited from a article from Bloomberg to fit this current page! Joe Danyko

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    By Shobhana Chandra

    July 19 (Bloomberg) -- Home resales in the U.S. probably rose in June and a gauge of the economic outlook improved, signaling the recession may soon be over, economists said before reports this week.

    Purchases of previously owned homes climbed to an annual rate of 4.83 million, the highest level since October, according to the median of 57 estimates in a Bloomberg survey before the National Association of Realtors’ report on July 23. Figures tomorrow may show the index of leading indicators climbed for a third consecutive month.

    Mounting evidence that housing is stabilizing is bolstering forecasts that government stimulus efforts will gain traction in coming months and lift the economy from the worst slump in five decades. Other reports may show rising joblessness is weighing on Americans’ moods, tempering optimism about any rebound.

    “The end of the recession could be pretty close,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “We’re getting near the bottom in housing. It’ll still be a very gradual recovery for the economy, with a labor market that’s very weak.”

    One reason for the projected increase in home resales is that prospective buyers are taking advantage of the plunge in prices caused by the foreclosure crisis. Filings reached a record in the first half of 2009, according to RealtyTrac Inc., an Irvine, California-based seller of default data. More than 1.5 million properties got a default or auction notice or were seized by banks in the six months through June.

    The New York-based Conference Board’s leading index, which points to the direction of the economy over the next three to six months, rose 0.5 percent last month after a 1.2 percent increase in May, according to the survey median.

    The jump in building permits was probably one of the biggest contributors to the predicted gain in the leading index, economists said. Fewer jobless claims and higher stock prices were also likely drivers.

    Bloomberg Survey

    ===================================================== ===========
    Release Period Prior Median
    Indicator Date Value Forecast
    ===================================================== ===========
    LEI MOM% 7/20 June 1.2% 0.5%
    Initial Claims ,000’s 7/23 18-Jul 522 560
    Cont. Claims ,000’s 7/23 11-Jul 6273 6390
    Exist Homes Mlns 7/23 June 4.77 4.83
    Exist Homes MOM% 7/23 June 2.4% 1.3%
    U of Mich Conf. Index 7/24 July F 64.6 65.0
    ===================================================== ===========

83.66+0.19(+0.23%)Oct 24 8:00 PMEDT