Dec. 24 (Bloomberg) -- U.S. sales of new houses may have edged up to a 1.125 million annual rate last month as mortgage rates held near the record low and companies added to payrolls, economists said in advance of a government report today. The November estimate, based on the median projection of 59 economists in a Bloomberg News survey, compares with October's 1.105 million sales rate. In only four other months has the sales rate been higher than 1.125 million. ``Mortgage rates remain historically low and as such have encouraged home buying,'' said Scott Winningham, an economist at Stone & McCarthy in Skillman, New Jersey. ``The housing sector has held up extremely well.''
The average 30-year fixed mortgage rate eased to 5.93 percent in November from 5.95 percent the month before, according to Freddie Mac, the No. 2 U.S. mortgage issuer. Rates were less than a percentage point higher than June's record low of 5.21 percent and have helped keep housing affordable while the U.S. starts to add jobs. Payrolls have risen by 328,000 since August. In other reports today, orders for goods made to last at least three years may have risen 1 percent in November, led by bookings for aircraft, computers and electronic equipment, according to the median of economists' estimates. An increase would be the fifth in the past six months and would compare with a 3.4 percent gain in October. The number of Americans filing claims for initial unemployment benefits may have held close to an almost three-year low last week. New Initial claims are projected to total 355,000 for the week that ended Saturday, compared with 353,000 the prior week, according to the median of economists' estimates. The Commerce Department releases the manufacturing report at 8:30 a.m. Washington time and the home sales report at 10 a.m. Washington time. The Labor Department releases the jobless claims statistics at 8:30 a.m. Washington time.
Home Building
Residential construction accounts for 5 percent of the economy and helps boost spending on furniture, appliances and other home furnishings. Sales of new homes reached a record 1.2 million annual pace in June. The next three biggest sales months were August, at 1.167 million, and July and September, both at 1.145 million. New home sales are counted when buyers sign contracts with builders, making the statistics a gauge of the housing market's current situation. Home resales, which account for about 85 percent of the residential real estate market, are typically counted when transactions close and may reflect buying decisions made a month or two earlier.
Home resales may have held at a 6.35 million annual pace last month, the third strongest on record, economists said in advance of next week's industry report, based on the median of 28 estimates. Existing home sales reached a record 6.68 million annual pace in September. U.S. homebuilder optimism in December held close to the highest in four years, the National Association of Home Builders reported earlier this month. The index registered 70, the same as in November, and the rating of buyer traffic rose to 51 from 47 the month before. Readings higher than 50 mean more builders view conditions as good than poor.
`Still Strong'
``The housing market is still strong and still is a very strong support for the economy, as it has been the last two, three years,'' said Douglas Duncan, chief economist at the Mortgage Bankers Association in Washington, in an interview last week. ``The purchase market will continue strong into next year.'' The Mortgage Bankers Association's index of applications to purchase homes rose to an average 425.75 in November from 390.88 the month before. The economy may expand 4.4 percent next year, the fastest since 1999, according to the median estimate in a Bloomberg News survey of 62 economists taken Nov. 25 to Dec. 4. Growth will be fueled by an increase in business and consumer spending and an expanding labor market.
``We're continuing to see strong, double-digit sales increases,'' said Donald Tomnitz, chief executive of D.R. Horton Inc., the second-largest U.S. homebuilder by stock-market value, in an interview last week. ``Obviously we've been helped by lower interest rates. But what would help us the most is if the economy gets kicking again.'' Revenue at D.R. Horton, based in Arlington, Texas, rose 32 percent in the fourth quarter, which ended Sept. 30, and increased in the double digits in October and November, Tomnitz said.
U.S. housing starts unexpectedly rose last month to the highest in almost two decades, helped by the low mortgage rates and backlogs of orders from earlier in the year. Homebuilders broke ground on 2.07 million houses at an annual rate last month, up 4.5 percent from a 1.98 million pace in October, the government reported last week. //www.bloomberg.com