Copyright AFP,2011 | Mar 22, 2011
US existing home sales fell in February
Sales of previously owned homes in the United States dropped sharply in February as banks tightened up lending despite ultra-low interest rates, a real estate agents group said Monday.
The new data was the latest sign that a crucial pillar of the US economy, the housing sector, continues to retard the overall recovery.
Existing home sales fell 9.6 percent last month after increasing three months straight, the National Association of Realtors said.
The group said banks were "unnecessarily" tightening the leash on home loans despite a clear demand from able buyers.
"Housing affordability conditions have been at record levels and the economy has been improving," said Lawrence Yun of the National Association of Realtors which released the data.
"But home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers," he said.
The February data was a new sign that, despite pickups in other areas of the economy, the key housing sector is stubbornly resisting rebound.
Data last week showed the other side of the housing sector, new home construction, also dropped in February, down 22.5 percent from the previous month.Yun said home prices continued to fall.
The February median for homes of any kind was $156,100, 5.2 percent below the year-earlier median.
A rising force in sales is investors paying cash for homes, while would-be residents remain hampered by tightening mortgage conditions.
"We'd be seeing greater numbers of traditional home buyers if mortgage credit conditions return to normal."
Another indicator of the sector's weakness was the 3.5 percent increase in the number of homes available on the market in February, despite the fall in prices.
The rising inventory suggests that large numbers of foreclosed homes continue to enter the markets, and will continue through 2012, said Thomas Julien of Natixis.
"All in all, the housing market will remain a source of concerns as the recovery remains sluggish and there is still a long way to fully normalize the excess home supply," he said.
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