Housing sector turning the corner; jobs market firming

Thu May 22, 2014 1:16pm EDT
 
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By Lucia Mutikani

WASHINGTON (Reuters) - U.S. home resales rose in April and the supply of properties on the market hit its highest level in nearly two years, hopeful signs for the stalled housing market recovery.

The National Association of Realtors said on Thursday existing home sales increased 1.3 percent to an annual rate of 4.65 million units, marking only the second gain in sales in nine months.

While that was a bit less than the 4.68-million unit pace economists had expected, it suggested the sector was regaining its footing after stumbling in the second half of 2013 under the weight of higher mortgage rates and house prices.

"This report provides the first crucial sign that the housing recovery may be on the verge of a rebound," said Millan Mulraine, deputy chief economist at TD Securities in New York.

Sales remain down 15 percent from a peak of 5.38 million units hit in July. Compared to April last year, sales fell 6.8 percent.

Housing is one of the main channels through which the Federal Reserve is seeking to boost growth via its monthly bond purchases. The housing slump has prompted Fed Chair Janet Yellen to caution it could undermine the economy.

Expensive home loans and rising house prices have sidelined first-time buyers. Investors, who had buoyed the market by buying homes to rent them out, also are stepping back.

Though an usually cold winter depressed activity, a dearth of homes for sale also stymied demand. Sales are expected to gradually trend higher for the rest of 2014 as job growth and the overall economy accelerate.   Continued...

 
A man grabs his briefcase as he waits in line to speak with employers at the UJA-Federation Connect to Care job fair in New York, March 21, 2012. REUTERS/Shannon Stapleton