WASHINGTON - Homeowners and investors hunting for any indication the housing market has bottomed out didn't get it yesterday, as the latest data from a real estate trade group moved that sign further down the road to recovery.
The National Association of Realtors said pending US home sales fell in February to the lowest reading since the index began in 2001. The trade group's seasonally adjusted index of pending sales for existing homes fell to 84.6 from January's upwardly revised reading of 86.2. A year earlier, the index stood at 107.6.
Wall Street economists surveyed by Thomson/IFR had predicted the index would inch up to a reading of 86.3.
A reading of 100 is equal to the average level of sales when the index started. The previous low was August's reading of 85.8, recorded at the height of the credit crunch.
With house prices falling and credit continuing to tighten, many economists say the housing market is likely to worsen in the coming months, though some remain hopeful about a recovery in the second half of the year.
"The question was whether things were starting to stabilize," said Global Insight economist Patrick Newport. "Apparently they're not." Newport predicts home sales will fall by another 5 to 10 percent before picking up at the end of the year, while the Realtors group forecasts sales will remain flat in the first half of the year before rebounding in the second half.
The Realtors report gives an early indication of how existing home sales are likely to fare for March, because of the typical lag of a month or two between when a buyer signs a home sales contract and the closing of the deal.
"Despite recent steps to provide more liquidity to the mortgage market and ease financing constraints for potential buyers, access to credit remains restricted, especially for marginal buyers," Aaron Smith, senior economist at Economy.com, wrote. If job losses prove worse than expected as the economy slows, "the floor forming under home sales could begin to cave in."