WASHINGTON (AP) -- The National Association of Realtors reports on sales of existing homes in February. The report is scheduled for release Thursday at 10 a.m. Eastern.
SALES FLAT: Economists forecast that sales were unchanged last month at an annual rate of 4.62 million, according to a survey by FactSet. That would match January's figure, which was the lowest in 18 months.
MOMENTUM SLOWS: Harsh winter weather, a limited supply of available homes and rising mortgage rates have caused sales to slump over the past six months.
Signed contracts to buy homes were flat in January after falling sharply in December. Signed contracts are usually followed in one to two months by a completed sale, so the flat reading points to little improvement in sales in the coming months.
Existing home sales climbed steadily in the first half of last year, reaching an annual pace of 5.38 million in July. And sales totaled 5.1 million in all of 2013, the most in seven years. That's still below the 5.5 million that is consistent with a healthy housing market.
But sales slowed in the fall as rising mortgage rates and higher home prices began to squeeze some buyers out of the market. Freezing temperatures and winter storms also kept prospective buyers away from open houses. Sales have fallen 14 percent since July.
HIGHER RATES, RISING PRICES: Home prices rose 12 percent nationwide in January compared with the same month a year ago, according to real estate data provider CoreLogic.
And the average interest rate on a 30-year mortgage rose to 4.37 percent last week from 4.28 percent. Rates have increased about a full percentage point since hitting record lows last spring.
The increase occurred after former Federal Reserve Chairman Ben Bernanke indicated last May that the Fed would start to slow its bond-buying program before the end of the year. The Fed had twice cut its monthly purchases by $10 billion and on Wednesday, said that it would trim another $10 billion from the program, to $55 billion per month.
The program is intended to push down longer-term interest rates and encourage more borrowing, spending and hiring.
- Real Estate