Home Sales Near Record Levels

Sales of existing homes hovered last month near record levels even as mortgage rates crept higher, the National Association of Realtors said Thursday.

Sales sagged 0.4 percent to a 5.02 million pace in February from January's revised record 5.04 million. The stock of unsold homes rose a bit to 1.98 million, a 4.7-month supply at the current sales pace.

Sales fell 7.8 percent in the Midwest to 1.18 million, fell 0.9 percent in the West to 1.07 million, rose 2.8 percent in the Northeast to 730,000, and rose 4.1 percent in the South to 2.05 million.

Economists surveyed by CBS.MarketWatch.com expected sales to fall to 4.98 million.

Despite the small drop-off, sales remain extremely strong. Housing has been a pillar of strength in the American economy for more than a year.

With mortgage rates slipping higher, "we are very unlikely to see further gains to 5.5 or 6 million," said David Orr, chief capital markets economist at First Union. "The tone of the market should remain very healthy."

"Sales should be robust for the next several months," said James R. Smith, chief economist for the real estate trade group. "All the favorable affordability factors that drive housing demand are at work as we approach the spring buying season, and many consumers are now going forward with their plans."

In a separate report, the Conference Board said its Help-Wanted Index fell 1 point to 93 in February. "Tight labor markets remain firmly in place," said Ken Goldstein, an economist with the board who expects monthly payroll gains of 200,000 a month for the next two quarters.

Written By Rex Nutting, CBS MarketWatch Washington bureau chief