Lowe's says housing recovery further off

ATLANTA (Reuters) - A recovery in the U.S. housing market will likely not occur until 2010 as economic forecasts indicate home prices and existing home sales will bottom later than expected, the chief executive of Lowe's Cos (LOW.N) said on Monday.

"Previously we'd been thinking that potentially in late 2009 we could start seeing a recovery," Lowe's Chairman and CEO Robert Niblock said in an interview. "Based on... the economic data it now looks like it's pushing out into 2010."

Niblock said the second-biggest home improvement retailer now views 2009 "as probably a little more challenging" than it did 60 days ago as rising unemployment and a deepening economic crisis weigh on consumers.

Lowe's reported better-than-expected third-quarter profit on Monday but cut its full-year outlook slightly, saying a tougher jobs picture, falling home prices and tight credit would continue to pressure business.

Niblock said limiting foreclosures was important to stem home price declines and get housing back on track. He said efforts by some in the banking industry and Fannie Mae (FNM.N) and Freddie Mac (FRE.N) to work with homeowners to minimize mortgage defaults were a step in the right direction.

"Minimizing the amount of foreclosures would be important" because the housing industry has a big impact on the U.S. economy, Niblock said.

When asked what advice he'd offer to U.S. President-elect Barack Obama, who will take office in January, Niblock said a second U.S. government stimulus package could help consumers who have pulled back spending because of job worries and tightening credit.

"That's certainly something that may be needed in the economy given the state of the consumer," Niblock said.

One issue Niblock said he'd encourage more thought on was the Employee Free Choice Act, legislation that would let unions be certified once a majority of employees signed union authorization cards rather than holding a vote.

Obama was an original co-sponsor of that bill, which Lowe's rival Home Depot (HD.N) has also said it opposes.

Niblock said he opposed provisions to the union bill as originally drafted that would take away a secret ballot process and would have a government arbitrator decide a contract should a company and union not be able to reach agreement.

"Passing something like that in this environment could potentially put further strains on an already fragile economy, at least in the way it was originally proposed," Niblock said.

He added that a secret ballot process "is key to what's made us a great nation and we'd like to see that continue."

(Editing by Tim Dobbyn)