Sales of previously owned U.S. homes rise more than forecast

Dynamics Improving

“Housing dynamics are improving,” Timothy Wadhams, chief executive officer of Masco, said in a May 22 presentation. The Taylor, Michigan-based company manufactures and sells home- improvement and building products such as cabinetry. “Demand is picking up, inventories are very, very low. So we ought to see a nice lift there.”

Record monetary stimulus by the Fed has helped hold down mortgage rates. The average fixed rate on a 30-year loan was 3.98% in the week ended June 13, up from an all-time low of 3.31% in November, according to data from McLean, Virginia-based Freddie Mac.

They risk rising further after Fed Chairman Ben S. Bernanke yesterday said the central bank may end bond purchases in the middle of 2014 if the economy keeps improving.

“If the incoming data are broadly consistent with this forecast, the committee currently anticipates that it would be appropriate to moderate the pace of purchases later this year,” Bernanke said. “If the subsequent data remain broadly aligned with our current expectations for the economy, we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year.”

FOMC Meeting

Bernanke spoke after the Federal Open Market Committee said it would maintain the $85 billion pace of monthly asset purchases and that it sees the “downside risks to the outlook for the economy and the labor market as having diminished since the fall.”

“Interest rates have risen, but they’re still at historic lows,” Robert Niblock, chief executive officer of Lowe’s Cos., the second-largest U.S. home improvement retailer, said earlier this week in an interview. The Mooresville, North Carolina-based company’s sales in the second quarter have recovered from March and April when rainy, colder-than-normal weather limited demand, he said.

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