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Sales of previously owned U.S. houses unexpectedly fell in February, showing that the real estate market is taking time to strengthen.
Purchases dropped 0.9 percent to a 4.59 million annual rate from a revised 4.63 million pace in January that was faster than previously estimated and the highest since May 2010, a report from National Association of Realtors showed March 21 in Washington. The median forecast in a Bloomberg News survey called for a rise to 4.61 million.
The glut of foreclosed properties is putting more homes on the market and creating a headwind for the industry that precipitated the last recession. Still, purchases may improve as job and income growth, cheaper homes and mortgage rates near a record low keep affordability near an all-time high.
“The U.S. housing market is stabilizing, and very gradually carving out a recovery,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, who correctly projected the February sales rate. “Housing demand should pick up in response to falling unemployment and attractive affordability.” •