Sales of previously owned US homes fell unexpectedly sharply in February and prices touched their lowest level in nearly nine years, implying a housing market recovery is still a long off.
The National Association of Realtors has reported that sales fell 9.6 per cent mont-on-month to an annual rate of 4.88 million units, snapping three straight months of gains. The percentage decline was the largest since July 2010.
Economists polled by Reuters had expected February sales to fall four per cent to a 5.15 million-unit pace from the previously reported 5.36 million unit rate in January, which was revised slightly up to 5.4 million.
The median home price dropped 5.2 per cent in February from a year earlier to $156,100 (£96,100), the lowest since April 2002.
“If the price declines persist, even with the job market recovery, that could hamper recovery in the housing market,” said NAR chief economist Lawrence Yun.
Compared with February last year, sales were down 2.8 per cent.
Oversupply of homes and a relentless wave of foreclosures are pressuring prices, holding back recovery in the sector, whose collapse helped to tip the US economy into its worst recession since the 1930s.
Foreclosures and short sales, which typically occur below market value, accounted for 39 per cent of transactions in February, up from 37 per cent the prior month.
All-cash purchases made up a record 33 per cent of transactions in February.
Sales last month fell across the board, with multifamily dwellings and single-family home units both dropping ten per cent.