Home Depot CEO: housing market optimism is premature

From the Financial Times:

Growing optimism over the US housing market may be premature, a leading retailer warned on Tuesday.

Frank Blake, chief executive of Home Depot, said housing market signals were still mixed.

"We are concerned about the accelerating rates of foreclosures, particularly in the western part of the country," he said, noting that one out of every 54 homes in California was in foreclosure.

Mr Blake said that a slowing foreclosure rate in California during the fourth quarter had led to an improvement in regional store sales but the trend had then reversed as foreclosure rates rose again in the first quarter.

The shift "provides a cautionary note on signalling a recovery prematurely", he said. "Before we see real improvement we believe we need to see sustainable deceleration in foreclosures."

There were 342,038 foreclosure filings in April, according to data from RealtyTrac, an increase of 1 per cent from the previous month and up 32 per cent from last year.