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Ahead of the Bell: Existing home sales

A real estate trade group's report is expected to show that sales of previously occupied homes inched up in June, a third straight monthly increase.
/ Source: The Associated Press

A real estate trade group's report is expected to show that sales of previously occupied homes inched up in June, a third straight monthly increase.

If economists' forecasts prove accurate, it would be another encouraging sign that a modest housing recovery has finally started.

June sales are forecast to rise 1.5 percent to a seasonally adjusted annual rate of 4.84 million units, from 4.77 million in May, according to economists surveyed by Thomson Reuters.

The National Association of Realtors' report on sales of existing homes in the U.S. is scheduled for release Thursday at 10 a.m. EDT.

The bursting of the housing bubble helped push the U.S. economy into the worst financial crisis in seven decades. Now the economy is hobbling the recovery of the real estate market.

Corporate layoffs are forcing more homeowners to miss their monthly mortgage payments and fall into foreclosure. Unemployment, currently at a 26-year high of 9.5 percent, isn't expected to peak until mid-2010.

About one in three homes sold in May was a foreclosure or distressed sale, dragging down the median price to $173,000 — 16.8 percent below a year ago. Falling prices coupled with new rules for property appraisers have caused many transactions to fall apart or be delayed.

And the fallout from the financial crisis continues. Wells Fargo & Co. on Wednesday forecast loan losses would continue in the coming quarters as more consumers are unemployed and can't make their payments.

The San Francisco-based company said some of its second-quarter loan losses came from the continuing cleanup of the loan portfolio acquired along with struggling Wachovia Corp. last year.