By ALAN ZIBEL
AP Real Estate Writer
WASHINGTON (AP) — Sales of new homes are expected to have increased in November for the third month in a row, a sign that the housing market is finally on solid ground.
The Commerce Department’s report on November’s new home sales is forecast to show a 2.3 percent increase to a seasonally adjusted annual rate of 440,000, from 430,000 in October, according to economists polled by Thomson Reuters.
The report will be released Wednesday at 9 a.m. It counts signed contracts to buy homes, rather than completed sales, so it will capture consumer reaction to Congress’ decision last month to extend and expand a homebuyer tax credit.
First-time buyers will still be able to save up to $8,000, and now homeowners who have lived in their current properties for at least five years can claim a tax credit of up to $6,500 if they relocate. To qualify, buyers must ink a deal by the end of April.
Still, some analysts don’t think the new deadline will have an immediate impact on sales, because many buyers won’t act until the 11th hour approaches.
“Buyer traffic is likely to be flat until spring,” said Mark Vitner, senior economist with Wells Fargo Securities.
And builders aren’t brimming with enthusiasm this winter. The National Association of Home Builders said last week its index of industry confidence fell to the lowest level since June, reflecting concern that job losses and a slow economic recovery will continue to stifle demand.
The real estate recovery is not only dependent on taxpayer dollars but also on the economy, which grew at a slower pace in the third quarter than originally thought. The economy grew at a 2.2 percent rate in the July-September period, down from an initial reading of 2.8 percent, the government said Tuesday.
Robert Toll, CEO of luxury builder Toll Brothers Inc., said earlier this month demand has been “choppy” after several strong months in the spring and summer.
“You just have to bite the finger, be patient, and wait until you see what comes out in the latter part of January, all of February and in the early part of March,” he said.
Home resales, meanwhile, are at the highest level in nearly three years. The National Association of Realtors said Monday that sales rose 7 percent from October to a seasonally adjusted annual rate of 6.54 million in November.