Sales of previously owned U.S. homes fell unexpectedly sharply in February and prices fell to their lowest in nearly nine years, an industry group said on Monday.
KEY POINTS: * The National Association of Realtors said sales fell 9.6 percent 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 polled by Reuters had expected February sales to fall 4.0 percent to a 5.15 million-unit pace from the previously reported 5.36 million unit rate in January, which was revised slightly up to 5.40 million. Compared with February last year, sales were down 2.8 percent.
TOM PORCELLI, CHIEF U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK, NEW YORK:
Weakness is abound in this report. Housing remains weak with a soft employment backdrop and difficult credit. Other details in the report were equally sobering, with home prices falling and supply jumping. At the risk of sounding like a broken record, we should not expect much from housing this year due to the ongoing imbalance in supply and demand. We expect another 5-10 percent drop in home prices over the next year and housing will remain a drag on overall growth.
DAVID CARTER, CHIEF INVESTMENT OFFICER AT LENOX ADVISORS IN NEW YORK:
This is a frustrating number. The U.S. residential real estate market doesn't seem to want to turn around despite better affordability. Government rebates may have distorted the market, and we need to work through inventory. I think recovery can be anticipated given affordability, though employment must improve.
VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS:
Data shows that within the housing market, homes priced under $100k and above $500k are the ends of the market actually experiencing an increase in sales volumes and the middle market (priced $100k-$500k) that is suffering. Sales are 2.8% lower than what they were in February 2010.
MARKET REACTION: STOCKS: U.S. stock index futures were little changed. BONDS: U.S. bond prices were slightly lower. FOREX: The dollar was little changed.