KCOY Santa Maria, Santa Barbara, San Luis Obispo - News-Ahead of the Bell: New Home Sales
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WASHINGTON (AP) - Sales of new homes likely rose from record lows in June, but the market remains weak now that potential buyers can no longer get federal tax credits.
Economists surveyed by Thomson Reuters expect new-home sales grew by 6.7 percent from a month earlier to a seasonally adjusted annual rate of 320,000. May's sales pace of 300,000 was the slowest on records dating back to 1963.
The Commerce Department's report is scheduled for at 10 a.m. EDT Monday.
Federal tax credits of up to $8,000 had propped up the housing market this year. Buyers needed to have a signed sales contract by April 30 to qualify, but they have until September 30 to complete the purchase.
Since the credit expired, the number of people shopping for homes has plunged, and homebuilders have become discouraged.
The National Association of Home Builders said earlier this month that its monthly reading of builders' sentiment about the housing market sank to 14 - the lowest level since March 2009. Readings below 50 indicate negative sentiment.
The weak job market and an increasing number of foreclosed properties have prompted builders to limit construction of new homes.
Conditions are not likely to improve soon. While the overall economy appears unlikely to fall back into recession, many analysts expect housing to struggle for some time. Sales of previously occupied homes, which make up the bulk of the market, are also falling. They dropped 5.1 percent in June and are expected to keep sinking, the National Association of Realtors said last week.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
