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New-home sales at record low in February

WASHINGTON - Sales of new homes unexpectedly fell in February to a record low as blizzards, unemployment and foreclosures depressed the market.

Purchases decreased 2.2 percent to an annual pace of 308,000, according to figures released Wednesday by the Commerce Department. The drop was the fourth consecutive monthly decline and the worst showing on records dating to 1963.

The median sales price rose 5.2 percent to $220,500, the largest advance since September 2007.

New-home sales are vying with foreclosure-induced declines in prices for existing homes in an economy where unemployment is forecast to average 9.6 percent this year, close to a 26-year high.

Treasury Secretary Timothy Geithner said Tuesday it would take a "long time" to repair the market as the administration takes steps to overhaul real-estate financing and regulation.

"Americans remain downbeat on the housing market," said David Semmens, an economist at Standard Chartered Bank in Manhattan. "We expect the continuation of poor sales to lead to a resumption of downward price pressure."

Sales were projected to climb to a 315,000 annual pace, according to the median estimate in a Bloomberg survey of 78 economists.

The report showed sales fell in three of four U.S. regions last month, those most likely to have been influenced by the winter storms. Purchases fell 20 percent in the Northeast, 18 percent in the Midwest and 4.6 percent in the South.

- Bloomberg News, with AP

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