New US home sales see fresh fall

The housing market is unlikely to recover soon, say analysts

Sales of new US homes dropped for the second month in a row this year, official figures show.

Commerce Department data showed the number of new homes sold fell 3.9% in February, after January's 15.8% drop.

The latest data puts the annual rate of new home sales at 848,000 - the slowest pace in nearly seven years.

The lower-than-expected figure adds to concerns that the US housing market is unlikely to recover soon, amid an oversupply of homes on the market.

Market fears

Apart from the Western region of the US, which saw sales up by 25.8%, all other regions saw home sales fall.

The most extreme fall was seen in the Northeast - down 26.8%.

"New home sales were much lower than expected," said Peter Cardillo, an analyst at Avalon Partners.

"It's weighting on the market because there are fears that the economy is slowing too much and that it could be negative for corporate earnings," he added.

The latest figures follow recent forecasts that the number of new homes will drop by 15% this year, well beyond an earlier prediction of a 5% decline.

The National Association for Business Economics poll suggested a worsening of the housing market, following a slowdown over the past year.