US home sales dive, prices near nine-year low

FE Team | Published: March 23, 2011 00:00:00 | Updated: February 01, 2018 00:00:00

WASHINGTON, Mar 22 (Reuters): Sales of previously owned US homes plunged in February and prices hit their lowest level in nearly nine years, implying a housing market recovery was still a long way off. The National Association of Realtors said Monday sales fell 9.6 per cent month over month to an annual rate of 4.88 million units, snapping three straight months of gains. The percentage decline was the largest since July. Economists had expected February sales to fall 4.0 per cent to a 5.15-million-unit pace from the previously reported 5.36 million unit rate in January. January's pace was revised up slightly to 5.40 million. "This is a frustrating number. The US residential real estate market doesn't seem to want to turn around despite better affordability," said David Carter, chief investment officer at Lenox Advisers in New York. Financial markets largely ignored the data. US stocks were up sharply in early trade, partly on news of a bid by AT&T for Deutsche Telekom AG's T-Mobile USA and growing hopes Japan would get its nuclear crisis under control. US debt prices extended losses as the US Treasury said it would begin selling off $142 billion in mortgage-backed securities it had acquired to help tame the financial crisis, while the dollar rose against the yen on intervention worries. The Realtors' group said the median home price dropped 5.2 per cent in February from a year earlier to $156,100, the lowest since April 2002, a sign of the relentless downward pressure on prices from a market flooded with foreclosure sales. "If the price declines persist, even with the job market recovery, that could hamper recovery in the housing market," said NAR chief economist Lawrence Yun. A glut of homes on the market and the flood of foreclosure properties are holding back a recovery in the housing sector, whose collapse helped to tip the US economy into its worst recession since the 1930s.