Shobhana Chandra
Bloomberg
January 16, 2011

Homebuilding probably dropped in December and sales of existing houses struggled to rebound from a post-tax credit slump, reflecting a market trying to regain its footing more than a year into the economic recovery, economists said before reports this week.

Builders began work on 550,000 houses at an annual rate, down 0.9 percent from November, according to the median estimate of 61 economists surveyed by Bloomberg News before Commerce Department data Jan 19. Other reports may show purchases of previously owned homes rose for a second month and a gauge of the economic outlook climbed.

KB Homes is among builders concerned unemployment stuck above 9 percent and a lack of confidence in the expansion may keep dissuading buyers. Federal Reserve policy makers have said they will go ahead with a second round of quantitative easing that will pump another $600 billion into financial markets by June in a bid to keep borrowing costs low.

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