Pending home sales drop to record low

Pending sales of previously owned homes fell a more-than-expected 1.9% in February to the lowest level on record, according to a report from a real estate trade group Tuesday that pointed to more troubles in the beleaguered housing market.

The National Assn. of Realtors index, based on sales contracts signed in February and seen as a key barometer of future housing sales activity, fell to 84.6 in February from 86.2. That was the lowest reading since the trade group began tracking this data in 2001.

Compared with a year earlier, pending sales were down 21.4%, according to the group.

Economists polled ahead of the report were expecting a monthly decline of 0.7%. January’s reading was revised up to a 0.3% gain after an initial flat reading.

“They were a little bit worse than expected, and people are coming to expect that . . . and we keep getting it,” said Todd Leone, head of listed trading at Cowen & Co. in New York.

Despite the weaker pending home sales reading in February, the real estate group said it expected existing home sales to stabilize for now and then possibly pick up in the latter half of this year.

“Exceptionally weak home sales related to jumbo loans problems will depress home prices in the first half of the year, but steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year,” said Lawrence Yun, the realty group’s chief economist.