Purchases held at a 4.75 million annual rate last month, according to the median forecast of 64 economists surveyed by Bloomberg. In August, demand reached a 4.83 million rate, the most since May 2010. Homebuilder confidence probably held at a six-year high in November, another report may show.
“You’ve got low mortgage rates, you’ve got gradual improvement in the labor market, and you have very low inventories,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, a subsidiary of the largest U.S. mortgage lender. “Housing is positioned to move significantly higher over the next year.”
The report from the National Association of Realtors is due at 10 a.m. in Washington. Bloomberg survey estimates ranged from 4.55 million to 5.05 million.
The average rate on a 30-year, fixed mortgage declined to 3.34 percent last week, the lowest in data going back to 1972, according to McLean, Virginia-based Freddie Mac.
Homebuilder SentimentA gauge of homebuilder sentiment held at 41 in November after six consecutive increases, a 10 a.m. report from the National Association of Home Builders/Wells Fargo is projected to show today. Readings lower than 50 mean more respondents said conditions were poor.
The Standard & Poor’s Supercomposite Homebuilding Index has advanced 70 percent since the end of last year, outpacing the 8.1 percent gain in the broader S&P 500.
“Continued weakness in housing -- reflected in falling prices, low rates of new construction, and historic levels of foreclosure -- has proved a powerful headwind to recovery,” Bernanke said last week. “It is encouraging, therefore, that we are seeing signs of improvement in the housing market in most parts of the country.”
The Fed chairman is pressing on with record easing including a plan to buy $40 billion a month of mortgage-backed securities, in a bid to spur growth and reduce a 7.9 percent unemployment rate.
Last RecessionHe has resorted to unorthodox policies six years after home prices started a plunge that knocked the economy into the longest recession since the Great Depression.
While tighter credit standards after a collapse in the subprime mortgage market were appropriate, “it seems likely at this point that the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery,” Bernanke said.
Some members of the Federal Open Market Committee said monthly mortgage bond purchases by the central bank may “reinforce the nascent recovery in the housing market,” according to minutes of the Oct. 23-24 meeting released Nov. 14.
Existing-home sales have improved after reaching a low of a 3.39 million annual rate in July 2010. In the buildup to the subprime lending collapse and recession, purchases reached a peak of 7.25 million in September 2005.
Storm SandyConstruction and home repair companies may get a lift from clean-up activity after superstorm Sandy, which swept up the Atlantic coast and left a path of destruction in the New Jersey and New York. The storm may provide a boost similar to that provided by Hurricane Irene, which added about $360 million in sales last year, Home Depot Inc. (HD) executives said on a Nov. 13 earnings call.
“The property damage, as we understand it, related to Irene was about $16 billion; the property damage for Sandy is about $20 billion, so it would suggest possibly higher sales, but it’s impossible for us to know right now,” said Carol Tome, the Atlanta-based company’s chief financial officer.