Government data are expected to show that new home sales rose for the third straight month in May, as builders start to see long-awaited encouraging signs about the housing market.
New home sales likely rose 2.3 percent last month to a seasonally adjusted annual rate of 360,000 units, from 352,000 units in April, according to economists surveyed by Thomson Reuters.
The Commerce Department report is scheduled to be released Wednesday at 10 a.m. EDT.
New home sales inched up 0.3 percent in April. The increase came from a downwardly revised rate of 351,000 in March. Sales still were 34 percent below the year-ago level.
The median sales price fell to $209,700, down almost 15 percent from a year earlier, but up nearly 4 percent from March. Prices likely will remain weak for months as builders try to price their stock of unsold homes against bargain-priced foreclosures.
Fallout from the housing crisis has played a central role in the longest U.S. recession since World War II. Foreclosures have spiked, financial companies have racked up multibillion-dollar losses and homebuilders like Pulte Homes Inc., D.R. Horton Inc. and Lennar Corp. have dramatically scaled back their operations.
But in recent months, homebuilders have grown more optimistic and said they see signs that the end of the housing market's three-year downward spiral may be near.
Some analysts think new single-family home sales hit bottom earlier this year and are gradually increasing. But builders still face challenges getting loans from banks to finance new construction projects, while many borrowers must comply with more stringent standards that often require more money for a down payment.
Meanwhile, sales of previously occupied homes rose modestly in May from April, the third monthly increase this year.
The National Association of Realtors said Tuesday that home sales rose 2.4 percent to a seasonally adjusted annual pace of 4.77 million, from a downwardly revised rate of 4.66 million in April. The results, however, missed analysts' expectations.
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