Home sales tumble, prices are near 9-year low

By Lucia Mutikani

WASHINGTON | Mon Mar 21, 2011 4:56pm EDT

WASHINGTON (Reuters) - Sales of previously owned U.S. homes plunged in February and prices hit their lowest level in nearly nine years, indicating a housing market recovery was still a long way off.

The National Association of Realtors said on Monday sales fell 9.6 percent month over month to an annual rate of 4.88 million units, snapping three straight months of gains. The percentage decline was the largest since July.

The weak sales were the latest evidence of the malaise in the housing sector and confirmed it would remain outside the strengthening and broadening economic recovery.

"The housing market is still very depressed and a major drag on the economy, especially household net worth," said Chris Christopher, a senior economist at IHS Global Insight in Lexington, Massachusetts.

Economists had expected a decline of only 4 percent to a 5.15 million-unit pace. The actual drop was greater than even the most pessimistic forecast in a Reuters survey of 53 economists.

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