March 21 (Bloomberg) — Sales of U.S. previously owned homes dropped more than forecast in February and the median purchase price declined to the lowest since April 2002, indicating the housing market is struggling to recover.
Purchases decreased 9.6 percent to a 4.88 million annual rate, less than the 5.13 million median forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed today in Washington. The median price declined 5.2 percent from a year earlier, and 39 percent of the sales were distressed properties.
Foreclosures are adding to the glut of distressed properties and pressuring prices, leaving some Americans with bigger mortgages than their homes are worth as joblessness hovers near 9 percent. The figures underscore the Federal Reserve’s view that the housing market “continues to be depressed” even as the rest of the economy improves.
“The demand for housing just isn’t there,” said Mark Vitner, senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “We have to clear this inventory of foreclosures. We think that happens in the second half of the year.”
Estimates for February existing home sales ranged from 4.8 million to 5.39 million, according to the median of 76 forecasts in the Bloomberg survey