RJ and Makay

It may be quite some time before the housing market fully recovers, suggest new data from the National Association of Realtors (NAR). Sales of previously owned U.S. homes fell dramatically in February and home prices declined to their lowest level in nearly nine years, the data show.

Specifically, February sales fell 9.6% month over month to an annualized rate of 4.88 million units after three straight months of gains. The percentage decline was the largest since July. "The housing market is still very depressed and a major drag on the economy, especially household net worth," observes Chris Christopher, a senior economist at IHS Global Insight.

Encouraging signs that the sluggish employment market might be showing signs of life have been noted by economists, with November marking a two-year low for the number of people applying for initial unemployment benefits. In addition to the slow-down in layoffs, retailers reported a strong October and the housing market posted a third consecutive monthly increase in signed contracts for home purchases. On Wall Street, the Dow Jones industrial average shot up over 90 points, and that’s after it leaped 249 points on Wednesday, the biggest gain since September 1. Also, earlier this week, additional economic reports showed that factories are producing more goods, construction spending has increased and auto sales are on the rise.

Nigel Gault, chief U.S. economist at HIS Global Insight predicts that private companies grew by a net total of 180,000 for November, an increase beyond his earlier forcast of 160,000 new jobs. In October, private firms added a net 159,000 jobs, which marked a change in the job creation trend, which had been stagnant almost all summer. Although the job growth number is probably a little less after government payroll declines are subtracted, Gault and other economists optimistically expect to see that the overall economy added 170,000 net jobs in November, although the general consensus is still only predicting a gain of 145,000. In November, a total of 151,000 jobs were added to the economy.