Ahead Of The Bell: Home Sales

WASHINGTON (AP) — The number of Americans who bought previously occupied homes likely rose in January for the fourth straight month. Modest sales gains are contributing to a more optimistic outlook this year for the troubled housing market.

Economists forecast that sales increased to a seasonally adjusted annual rate of 4.65 million last month, according to a FactSet survey. The National Association of Realtors will report on January re-sales at 10 a.m. EST Wednesday.

For all of 2011, sales totaled only 4.26 million. That's far below the 6 million that economists equate with healthy housing markets and a sign that home sales remain depressed.

Still, December's sales pace rose to 4.61 million, the fastest in nearly a year. And it reached that level after the third straight monthly increase.

Economists say conditions are in place for further gains this year. Prices have declined. Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might be open to buying this year — and they responded in January to that interest by requesting more permits to construct single-family homes.

Much of the optimism has come because hiring has improved. More jobs are critical to a housing rebound. In January, employers added 243,000 net jobs — the most in nine months — and the unemployment rate fell to 8.3 percent, the lowest level in nearly three years.

The supply of homes has also declined, though it's still historically high at nearly 2.4 million. If the supply continues to fall, prices could rise, more sellers would put homes on the market and more people would likely consider buying.

Economists caution that the damage from the housing bust is deep and the industry is years away from fully recovering. Since the bubble burst, sales have slumped under the weight of foreclosures, tighter credit and falling prices.