Home Sales Drop, Prices Are Nearly 9-year Low

Sales of previously owned U.S. homes fell in February and prices have reached their lowest level in nearly nine years, indicating a recovery in the housing market was still far away.

National Association of Realtors said Monday sales fell 9.6 percent month on month annual rate of 4.88 million units, taking three straight months of gains. The percentage drop was the highest since July.

Weak sales in the last case of nausea and evidence has confirmed that remains outside to strengthen and broaden the economic recovery.

"The housing market is still very depressed and a significant impact on the economy, especially in the net worth of households," said Chris Christopher, senior economist for IHS Global Insight in Lexington, Massachusetts.

Economists expected a decline of 4 percent to a rate of 5.15 million units. The decline was larger than even the most pessimistic, according to a Reuters poll of 53 economists.

Analysts say the severe winter weather in January may have dampened sales in February. Home sales are measured when contracts are closed and the drop in sales last month was telegraphed by a decline in contracts during the month of January.

real estate group also took note of the conditions of the credit extended, and the assessments at home, was burdened by the sales price agreed upon.

A housing glut in the market and a wave of executions that the slow recovery in the housing sector, whose collapse helped tip the U.S. economy in its worst recession since the 1930's.

In addition, a weak housing market, rising oil prices are a threat to economic recovery and the investigation on Monday was about three-quarters of Americans spending was downsizing because of high gasoline prices.

HOUSE PRICES casts a tranquil

U.S. financial markets largely ignored the data, with stocks on Wall Street ended 1.5 percent higher. Prices of U.S. Treasury notes fell and the dollar hit a fresh 4-1/2-month low against the euro but rose against the yen.

Although economists are cautiously hoping the improvement of the labor market would lift home sales in coming months, plunging home prices could throw a spanner in the works.

NAR said the median house price fell 5.2 percent in February to $ 156.100 a year earlier, the lowest in April 2002 characters relentless downward pressure on prices in the market flooded with foreclosure sales.

"If the price continues to drop, even with the recovery of the labor market, which could hamper the recovery of the housing market," said Lawrence Yun, chief economist at trade group.

Data last week showed a drop in housing construction on Wednesday and the government should register a marginal increase in sales of single family homes in February. Home resales over 90 percent of domestic sales and economists said they are weighing on new home sales and construction.

Foreclosures and short sales, which usually occurs below the market value, accounted for 39 percent of transactions in February, its highest level since April 2009, up from 37 percent the previous month, the group said trade. All cash purchases made a record 33 per cent of transactions in February.

According to the Group's real estate prices of new homes have been in use for 45 per cent higher than the prices of existing homes, the award, which is traditionally about 15 percent, suggesting a previously owned homes for sale below cost construction.

At the February sales pace that represented all of the existing housing a 8.6 months supply, against 7.5 in January. The provision of six to seven months is generally considered ideal, with higher values ​​indicate lower house prices.

"Inventory is still high, about one third higher than it was before the recession. We are not going to see new home sales to recover before the list of sales of existing homes can be worked down," said Steve Blitz a senior economist at ITG Investment Research in New York.

"We do not even know what the inventory. We see an offer visible, but then there is a shadow supply entering and exiting the market, according to the time of the year. There is still a sickly market nationally. "

Sales last month fell across the board, family housing and apartments fell by 10 percent and units of single-family home falling 9.6 percent. Compared to February last year, total sales fell 2.8 percent.

While sales dipped in all regions last month, economists said the model is likely to be less uniform in the coming months, with the regions where the labor market is strong enough showing more life than others.