Sales of previously owned U.S. houses unexpectedly fell in February, showing that the real-estate market is taking time to strengthen.
Homes for sale outside of Greensboro, North Carolina.
Purchases dropped 0.9 percent to a 4.59 million annual rate from a revised 4.63 million pace in January that was faster than previously estimated and the highest since May 2010, a report from National Association of Realtors showed today in Washington. The median forecast in a Bloomberg News survey called for a rise to 4.61 million.
The glut of foreclosed properties is putting more homes on the market and creating a headwind for the industry that precipitated the last recession. Still, purchases may improve as job and income growth, cheaper homes and mortgage rates near a record low keep affordability near an all-time high.
“The U.S. housing market is stabilizing, and very gradually carving out a recovery,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, who correctly projected the February sales rate. “Housing demand should pick up in response to falling unemployment and attractive affordability.”
Estimates of the 77 economists surveyed by Bloomberg ranged from 4.44 million to 4.8 million after a previously reported 4.57 million pace in January.
Stocks held losses after the figures. The Standard & Poor’s 500 Index dropped 0.1 percent to 1,403.54 at 10:27 a.m. in New York.
Existing-home sales, tabulated when a contract closes, climbed to 4.26 million last year, from 4.19 million in 2010. Demand peaked at 7.08 million in 2005 during the housing boom. In 2008, sales totaled 4.1 million, the least since 1995.
Source: Bloomberg | Timothy R. Homan