Existing-home sales fell in February after sustained gains the previous three months, according to a recent report by the National Association of Realtors (NAR). Existing-home sales, which include recently purchased single family, townhomes, condominiums, and co-ops, fell 9.6 percent compared to the previous month. Analysts have revised their forecast and are predicting 4.88 million existing-home sales for 2011. This figure is 2.8 percent off the pace recorded at this time last year.

Existing Home Sales By Region

NAR Chief Economist Lawrence Yun expects fluctuation in the recovery process. "Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers," Yun said. "This tug and pull is causing a gradual but uneven recovery. Existing-home sales remain 26.4 percent above the cyclical low last July."

Investors accounted for 19 percent of February's existing-home sales, down from 23 percent reported in January. First-time home buyers purchased 34 percent of the existing homes sold during that time, up over the 29 percent reported the previous month. The rest were repeat home buyers. “We’d be seeing greater numbers of traditional home buyers if mortgage credit conditions return to normal,” Yun said.

Housing inventory picked up 3.5 percent to 3.49 million existing homes for sale. This represents an 8.6 month supply at the current sales pace.