Sales of existing homes fell for a third straight month in February, pushing sales down to the lowest level since last July. If this trend continues it will make it very difficult for the overall economy to get back on track.
The weakness in sales caused housing prices to drop almost 2 percent from a year ago to $165,100 on a national level. In the West, sales are down almost 5 percent.
Continued high unemployment and an ongoing extremely difficult lending environment will keep a lid on the housing market and limit overall sales and possible future price appreciation.
Inventory of unsold homes jumped to 8.6 months. 6 months inventory of unsold homes is considered a balanced market and not regarded as a buyer or seller market. If the supply of unsold homes continues to jump at these level and increase to double-digits it will put the brakes on the housing recovery and add significant downward pressure on prices.--Patrick
Expert opinion:
"Without a firm foundation in housing, the economy will struggle to return to normal," said Lawrence Yun, chief economist for the Realtors.
