U.S. existing homes sales fall

Sales of existing homes in the United States fell for a third straight month in February, the National Association of Realtors reported Tuesday.

Sales dropped 0.6 per cent to a seasonally adjusted annual rate of 5.02 million.

That is its lowest level since last July. There is concern that the fragile housing rebound could falter, making it harder for the overall economy to recover.

The fall in sales depressed prices, with the median home price dropping by 1.8 per cent from a year ago to $165,100.

Sales activity varied across the country. In the Midwest, sales jumped almost nine per cent, and were up more than two per cent in the Northeast. In the South, sales fell about one per cent, and were down almost five per cent in the West.

Nationally, sales have been declining since November, despite the extension of tax credits for homebuyers. There is an $8,000 credit for first-time buyers and a $6,500 credit for current homeowners who have lived in their property for the past five years.

"Without a firm foundation in housing, the economy will struggle to return to normal," said Lawrence Yun, chief economist for the Realtors.

He said it will be critical to see a rebound in sales in coming months to keep inventories from surging and adding further downward pressure on prices.