Existing home sales slump in February
* Sales fell 9.6% to a seasonally adjusted annual rate of 4.88 million units from 5.4 million in January. That was much worse than the 5.12 million average forecast of analysts polled by Bloomberg.
* By property type, single-family home sales dropped 9.6% while condominium and coop sales fell 10%. By region, sales fell across the board -- 7.2% in the Northeast, 8% in the West, 10.2% in the South, and 12.2% in the Midwest.
* The number of homes on the market rose to 3.488 million from 3.369 million a month earlier. That was down about 1.2% from year-earlier levels, however. The "months supply at current sales pace" indicator of inventory popped to 8.6 from 7.5 a month earlier. The median price of an existing home dipped to $156,100, off 5.2% from a year ago and the lowest going all the way back to April 2002.
After a nice pop at the end of last year, the housing market is stumbling once again. Existing home sales dropped twice as much as expected in February, with activity deteriorating in every region and across property types. While the supply of homes for sale has stabilized, we remain grossly oversupplied. As a result, home prices slipped to a fresh nine-year low last month.
The latest figures underscore the lengthy nature of the housing market "recovery" -- if you even want to call it that. We still have too many homes on the market, and too few qualified buyers willing to step up to the plate. That's keeping the pressure on home pricing. I expect these stagnant, post-bubble market conditions to persist for several quarters as we gradually work off the excesses of the early 2000s.