Existing Home Sales Probably Declined For A Third Consecutive Month (HD)

Before the report containing the data on existing home sales comes out today Bloomberg News did a survey of 74 economists and the conclusion is that probably the sale of existing homes in the U.S. declined for a consecutive third month in February. This is a clear indication that lack of jobs is acting as a hindrance in government efforts to revive demand.

According to a median forecast of the economists surveyed, purchases fell 1.1% to an annual rate of 5 million. This is the lowest level in eight months. Although the extension and expansion of a federal tax credit had helped stabilize the housing market in 2009, this year the pick-up in sales is yet to happen probably because the job market is not looking up. Among other companies, Home Depot Inc. (NYSE: HD) is also reducing prices to try and stimulate demand as the U.S economy recovers from the worst recession since the 1930s.

Zach Pandl, an economist with Nomura Securities International Inc. in New York, said, “We’re not going to see a significant recovery for some time, though there is a recovery in housing.” He added “We really need to see the job market picking up.” The January sales had come at a pace of 5.05 million, which was a 7.2% decline from December, which in turn had seen a 16% decline from the previous month. For February, the survey estimates range from 4.75 million to 5.2 million. While prices and borrowing costs continue to be low, the missing ingredient for a pick up in the industry remains a lack of growth in employment opportunities. Once this starts the housing market will surely see a rebound.