US home sales dip amid fragile market recovery

Sales of previously owned US homes fell slightly in February, according to a trade group report yesterday that underscored the fragile nature of the housing market’s recovery.

The National Association of Realtors said sales fell 0.6 per cent month-on-month to an annual rate of 5.02m units, the third straight month of declines in sales. January’s sales were unrevised at 5.05m units.

February sales were expected to drop to a 5m-unit pace. Compared to February last year, home sales were seven per cent higher.

Home sales surged on the back of an $8,000 (£5,300) tax credit for first-time buyers, but have faltered in recent months, raising worries of a relapse in the sector that largely triggered the recession.

Even though the popular tax credit has been extended and expanded, sales have stayed subdued and hopes of a bounce back before the April deadline are fading.