Ahead of the Bell: New Home Sales

New home sales expected to show 5th straight monthly increase in August

• On 6:39 am EDT, Friday September 25, 2009

WASHINGTON (AP) -- Government data are expected to show that new home sales rose in August for the fifth consecutive month, a sign that the housing market recovery is still on track.

A jump in new home sales would be welcome news after sales of previously occupied homes, which make up the bulk of the market, dipped 2.7 percent last month, the National Association of Realtors said Thursday. Analysts expected home resales to rise.

New home sales likely rose 1.6 percent last month to a seasonally adjusted annual rate of 440,000, from 435,000 in July, according to economists polled by Thomson Reuters. The Commerce Department report is scheduled to be released Friday at 10 a.m. EDT.

Sales of new homes surged 9.6 percent in July, the strongest pace since September 2008. Homebuyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price, or up to $8,000, for first-time owners. Sales must be completed by the end of November for buyers to qualify.

Builders and real estate agents are pressing Congress for that credit to be extended. If it isn't, they say sales could dip.