Existing U.S. homes sales at high

Purchases rose 2.3 percent to a 5.7 million annual rate, according to the median forecast of 60 economists surveyed by Bloomberg News. The expected increase from September's 5.57 million pace would be the sixth in the past seven months.

Cheaper homes and stimulus such as the US$8,000 homebuyer tax credit, extended and expanded by the Obama administration this month, have revived an ailing housing market that contributed to the worst economic slump since the Great Depression. Further improvement that would aid the economy's recovery depends on an easing in unemployment and foreclosures.

“We are making progress in housing,” said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. “Inventories are getting under control due to the pickup in sales. It's not going to be a vigorous recovery but it'll contribute to growth.”

The National Association of Realtors' report is due at 10 a.m. in Washington. Bloomberg survey estimates ranged from 5.2 million to 6 million. Resales fell to a 4.49 million pace in January, the lowest level since comparable records began in 1999.

Previously owned home sales are compiled from contract closings and may reflect purchases agreed upon weeks or months earlier. Many economists consider new home sales, recorded when a contract is signed, a more timely barometer of the market.

The Commerce Department may report on Nov. 25 that new home sales rose 0.8 percent in October to a 405,000 annual pace, according to the Bloomberg survey.

The Standard & Poor's Homebuilder Supercomposite Index, which includes Toll Brothers Inc., has gained 63 percent since March 9, compared with the broader S&P 500 gauge that has increased 61 percent from the 12-year low reached that day.

Home construction seized up last month as builders waited to find out if the tax credit would end, a Commerce Department report showed last week. Builders in October broke ground on the fewest houses since April's record low annual pace.

Sales and construction may get another boost after President Barack Obama on Nov. 6 extended the incentive until April 30. Earlier, buyers had to close the transaction by Nov. 30 to be eligible. The government also expanded the program to include some current owners.

Borrowing costs may remain low as the Federal Reserve has signaled it'll keep the benchmark interest rate near zero for an extended period. The average rate on a 30-year fixed mortgage fell last week to 4.83 percent, the lowest since the week ended May 21, according to Freddie Mac.

While low rates and government aid are making it easier to buy a home, the labor market remains a risk. The unemployment rate, which rose to a 26-year high of 10.2 percent last month, will stay above 10 percent through the first half of 2010, a Bloomberg survey showed.

Foreclosure filings surpassed 300,000 for an eighth straight month in October as rising joblessness made it tougher for homeowners to pay bills, according to RealtyTrac Inc. data.

Some companies see a potential for stronger demand. Hovnanian Enterprises Inc., New Jersey's largest homebuilder, has signed contracts or options to buy 4,000 land lots in preparation for a market recovery, said Chief Executive Officer Ara K. Hovnanian. The Red Bank, New Jersey-based builder had reduced its land holdings during the recession.

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