Sales of existing homes fell in February for a third month, indicating a lack of jobs is hindering government efforts to revive demand.
Purchases dropped 0.6%, to a 5.02 million annual rate, the lowest level in eight months and in line with the median forecast of economists surveyed by Bloomberg News, figures released Tuesday by the National Association of Realtors showed. The median price fell 1.8% from February 2009.
The extension and expansion of a federal tax credit that helped stabilize housing in 2009 has yet to spark sales this year as hiring has not materialized.
"It's a fragile recovery. We are bouncing along the bottom," said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla., who forecast a 5 million sales pace.
"We ultimately need to see job growth to get a sustainable rebound."
Existing-home sales were forecast to fall to a 5 million annual rate, according to the median estimate of 74 economists in a Bloomberg survey. Projections ranged from 4.75 million to 5.2 million, after an initially reported 5.05 million rate in January.
Purchases of existing homes climbed 7.9% from a year earlier before adjusting for seasonal patterns.
The median price dropped to $165,100 from $168,200.
The number of previously owned homes on the market jumped 9.5%, to 3.59 million.
At the current sales pace it would take 8.6 months to sell those houses, compared with 7.8 months at the end of January.
The increase in supply last month was "unusual," Lawrence Yun, the Realtors' chief economist, said in a news conference Tuesday.
The jump may be caused by more distressed properties coming on the market and by trade-up buyers who are putting their houses up for sale in advance of other purchases, he said.
The share of homes sold to first-time buyers increased to 42% from 40% in January, Yun said.
The report showed sales of existing single-family homes fell 1.4%, to a 4.37 million annual rate. Sales of condos and co-ops increased 4.8%, to a 650,000 rate.
Purchases dropped in two of four regions, led by a 4.7% decline in the West. A lack of inventory in the California market is restraining purchases in the West, Yun said. Sales fell 1.1% in the South, rose 2.4% in the Northeast and climbed 2.8% in the Midwest.
Existing-home sales, which account for more than 90% of the market, are compiled from contract closings and may reflect purchases agreed upon weeks or months earlier. Many economists consider new-home sales, recorded when a contract is signed, to be a more timely barometer of the market.
The Commerce Department may report today that sales of new homes rose last month after slumping in January to the lowest level since records began in 1963.
In November the Obama administration extended a first-time-buyer tax credit that was due to expire at the end of that month and expanded it to include some current owners. The extension covers closings through June as long as contracts are signed by the end of April.