Sales of previously owned homes expected to slip further in February

Ahead of the Bell: Home Sales

WASHINGTON — Sales of previously owned homes are likely to have fallen for the third straight month in February as bad weather and a shaky economy outweighed the government’s attempt to prop up the market.

Analysts surveyed by Thomson Reuters forecast sales fell 1 percent in February from a seasonally adjusted annual rate of 5 million units in January. The report will be released at 10 a.m. EDT by the National Association of Realtors.

The sales pace for existing homes of 5.05 million in January had been the weakest showing since last summer. Analysts saw that performance as an indication that continued high unemployment and tight lending were outweighing the government’s housing rescue attempts.

Economists are concerned that when government programs that have been supporting housing are withdrawn, it will result in the real estate market taking another turn for the worse.

The government has spent billions of dollars to keep mortgage rates low and give buyers tax breaks, but both programs are set to end this spring.

Home sales have been sluggish this winter even though the deadline for a tax credit for first-time home buyers was extended. It had been set to expire on Nov. 30. That caused sales to surge last fall. Congress extended the deadline until April 30 and expanded it to cover existing homeowners who move.

But economists say so far the extention has not had much of an impact on sales. Sales of existing homes are up nearly 12 percent from the bottom but are down 30 percent from their peak hit more than four years ago at the top of the housing boom.

The report on existing home sales follows a government report last week that construction of new homes and apartments fell 5.9 percent in February to a seasonally adjusted annual rate of 575,000 units. That decline was blamed on winter blizzards holding down activity, particularly in the Northeast.