Sales of previously owned US homes dropped slightly in February, based on a report by the National Association of Realtors (NAR).
Sales fell 0.6 percent month-over-month to an annual rate of 5.02 million units, the sales’ third straight month of decline, according to the trade group. Sales in January were unrevised at 5.05 million units.
Analysts polled had expected sales in February to plummet to a pace of 5 million units.
Home sales were higher by seven percent as compared to that in February 2009.
“Our view is that housing is bottoming and beginning a slow improvement, but we’re going to bounce along the bottom for a while,” said Henry Smith, chief investment officer at Haverford Trust Co in Philadelphia.
Home sales rose on the back of a US$8,000 tax credit for first-time buyers, but have faltered in recent months, raising concerns of a relapse in a sector that primarily triggered the worst US recession since the 1930s.
Sales have remained subdued and hopes of a rebound before the April deadline are fading, although the popular tax credit has already been expanded and extended.
To benefit from the tax rebate, potential buyers have to sign contracts before April and close them by June.
According to Lawrence Yun, chief economist of NAR, the trade group was hoping for an increase in sales in the coming months.
“The key test for a durable recovery comes in the next few months as the credit deadline approaches,” he said.
“If we see a surge in home buying comparable to last fall in the months leading up to the original tax credit deadline, then enough inventory should be absorbed to ensure broad home price stabilisation.”
NAR said that in February, the inventory of existing homes for sale climbed 9.5 percent to 3.59 million units from the previous month. February’s weak sales pace corresponds to the worth of sales for 8.6 months – the highest since August.
The national average home price dropped 1.8 percent to US$165,100 from February last year.
The single-family homes segment, which is the biggest portion in the market, accounted for most of the February home sale declines. It fell 1.4 percent to an annual rate of 4.37 million units. Condominium and co-ops soared 4.8 percent to a 650,000-unit rate.