Existing Home Sales Fall Again, But Less Than Expected

Sales of existing homes were down for the third consecutive month in February, but positive signs for a housing recovery came as the drop was less than expected by analysts.

The National Association of Realtors said on Tuesday that resales of existing homes fell by 0.6 percent to an annual rate of 5.02 million last month from 5.05 million in January. The fall in sales was much better than the 2.0 percent that economists had expected.

The average price of existing homes in February fell 1.8 percent to $165,100.

Severe winter snowstorms impacted the sales of existing homes, while demand is also down from a spike last fall due to the homebuyer tax credit. The government backed stimulus to spur the U.S. housing market was extended until the end of April.

Homebuyers are looking past the high unemployment rate and have used lower interest rates and government incentives over the last year, as home sales have increased 7.0 percent year over year for February.

The average rate on a 30-year mortgage was 4.99 percent in February, down from the 5.03 percent rate in the previous month, while the inventory of used homes rose by 9.5 percent to 3.59 million homes available for sale, an 8.6-month supply at the current sales pace.

Sales in the Northeast rose 2.4 percent despite the severe weather throughout last month, while sales were up 2.8 percent in the Midwest. In the West, sales fell 4.7 percent and were down 1.1 percent in the South.