October 25, 2012
By Bloomberg News
Americans bought new homes in September at the fastest pace in two years, another sign the industry whose decline was at the heart of the recession is bouncing back.
Sales climbed 5.7 percent to a 389,000 annual pace, the most since April 2010, following a revised 368,000 rate in August, figures from the Commerce Department showed Wednesday in Washington. The median estimate of 75 economists surveyed by Bloomberg called for an increase to 385,000.
Population growth and mortgage rates pushed to record lows by Federal Reserve purchases of housing debt are generating sales for builders like Toll Brothers Inc. and spurring the three—year economic recovery. Housing starts in September jumped 15 percent to the fastest pace since July 2008, a report last week showed.
“We continue to see some early but consistent signs of housing recovery, which makes us increasingly optimistic about a more structural demand recovery,‘ Marc Bitzer, president of Whirlpool North America, said during an Oct. 23 earnings call. Shares of Benton Harbor-based Whirlpool Corp., the world’s largest appliance maker, Wednesday reached the highest level in more than two years after the company lifted its 2012 earnings forecast.
“All the things that were really holding back housing are finally starting to lift,” said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Conn., who projected sales would climb to 390,000. “It really is tough to find any bad signs here. Inventories are very, very lean. Assuming the economy remains on track, housing should continue to improve for the rest of the year and into 2013.’
Stocks fell, erasing earlier gains, after the Fed said employment growth is slow and strains infinancial markets continue to pose risks to the economy. The Standard & Poor‘: S00 Index dropped 0.3 percent to 1,408.75 at the close in New York. Treasury securities declined, sending the yield on the benchmark 10-year note up to 1.79 percent from 1.76 percent late Wednesday.