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Commerce Dept: February U.S. Home Sales Declined

New U.S. homes sales fell in February 2006, dropping by the largest amount in nine years. This decline was also the fourth consecutive month in a row recording a decline, raising fears that the American housing market is in for a rough time in the coming months. Estimates in previous months in the media had warned repeatedly of a potential "burst" of the real estate bubble in the United States.

The Commerce Department announced that sales of single-family homes dropped 10.5 percent in February 2006. This downturn followed a 5.3 percent fall in January, and was the largest recorded decline since April 1997.

According to some estimates, home prices were further depressed as a result of the slowdown in sales, with the median price of new homes falling to $230,400 in February, which was 1.6 percent below the level recorded the previous month. Analysts are now saying the decline and revisions could be a signal of a coming slowdown in the housing market.