Home sales dip in February

WASHINGTON -- Americans bought fewer previously owned homes in February, but sales still hit the second-highest level on record.

The National Association of Realtors said Monday that sales of existing homes dipped 2.8 percent to a seasonally adjusted annual rate of 5.88 million, not far off the rate of 6.05 million in January.

Given that, analysts were hopeful that consumer spending, which accounts for two-thirds of all economic activity in the United States, would hold up fairly well in coming months and help along the economic recovery.

"With existing-home sales at near-record levels, we should expect that once households start fixing them up, spending will really soar," said Joel Naroff of Naroff Economic Advisors.

In contrast to past downturns, consumers kept buying homes and other big-ticket goods throughout the recent recession. Because of that, Federal Reserve Chairman Alan Greenspan and others have expressed concerns that consumers would have less pent-up appetite to spend, making for a less-than-sizzling recovery. Some have worried that retrenchment by consumers or other factors could send the country back into recession.

But top economic forecasters surveyed by the National Association for Business Economics said Monday a "double dip" recession was unlikely this year.

The median home sale price -- meaning half sold for more and half for less -- was $151,000 in February, an 8.2 percent increase from the same month a year ago.

Low mortgage rates, mild weather, increases in home values and generally good consumer attitudes all helped to keep sales at a solid level, economists said.