WASHINGTON – Sales of previously owned homes dropped 9.6 percent in February and prices fell to their lowest level since 2002, reflecting a continued slump in the U.S. real estate market.
The National Association of Realtors on Monday said sales of existing homes dropped to a annual rate of 4.88 million from an upwardly revised 5.4 million in January. The data is seasonally adjusted.
Economists surveyed by MarketWatch expected sales to drop to a rate of 5.1 million.
Existing-home sales were 2.8 percent lower in February 2011 than they were in the same month a year earlier.
The distressed state of the market has also drawn heavy interest from investors. Many have plunked down all cash to buy homes in anticipation of selling them at higher prices as the economy improves.
Investors accounted for a still-high 19 percent of all existing-home sales in February, down from 23 percent in the prior month. Distressed sales jumped to 39 percent from 37 percent in January, the highest level in two years.
All-cash sales, meanwhile, edged up to a record 33 percent of total purchases. That’s more than three times the average in a healthy economy.
Some good news: the percentage of first-time buyers purchasing existing homes rose to 34 percent from 29 percent in the prior month. In normal times, first-time buyers account for about two-fifths of all existing-home sales.
First-time buyers appeared to have been lured by falling prices. The median price of homes sold fell 5.2 percent from last year to $156,100, the lowest at least since April 2002.
Sales fell in all four regions, with the Midwest experiencing the biggest decline. Sales declined 12.2 percent.
Inventories of existing U.S. homes for sale rose 3.5 percent to 3.49 million, representing 8.6 months’ supply. That was up from 7.6 months last month.
Jeffrey Bartash/The Associated Press