INSTANT VIEW-Existing home sales stronger than expected

NEW YORK (Reuters) - The pace of existing home sales in the United States rose in February to a 5.03 million-unit annual rate while prices took a record fall, a trade group said Monday.

KEY POINTS: * While February broke a six-month streak of decreasing home sales, it also saw an 8.2 percent decline in median home prices from a year ago. That drop to $195,900 was the sharpest since the trade group began keeping records in 1968. * Economists polled by Reuters were expecting home resales to fall to a 4.85 million-unit pace from the 4.89 million-unit rate for January, which remained unrevised. * The inventory of homes for sale fell 3 percent to 4.03 million units at the end of February, which represents a 9.6 months' supply at the current sales pace.

COMMENTS:

DAN PEIRCE, PORTFOLIO MANAGER, GLOBAL ASSET-ALLOCATION GROUP, STATE STREET GLOBAL ADVISORS, BOSTON:

"We saw a nice surge in mortgage applications in January, so we are seeing the echo of that in today's home figures. As far as home prices go, it reveals how consumers have to lower expectations if they want to sell their house. The regulators aggressive liquidity actions are definitely having an impact."

PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK:

"It's clearly a positive indication. We got wind of this from data on pending home sales. It does seem as if we can tentatively call a bottom in existing home sales. There is price weakness, but that was a given. Some progress was made on reducing inventory. It rose last time and now it's fallen back, though not quite back to where it was.

"The success of the spring home selling season is critical to the outlook. And so far so good on the results. Getting a sense of where prices are going to wind up is critical to the pricing of mortgage-backed securities because it will affect the default rates and pricing those securities is critical to stabilizing the financial markets more definitively."

NICK BENNENBROEK, HEAD OF CURRENCY STRATEGY, WELLS FARGO, NEW YORK:

"The housing number was good news for financial markets and we did see a bounce on the dollar. But we do see continued weakness in home prices. From the point of view of trying to get past the housing slump, we should see a significant fall in prices that would lead to some renewed buying interest. And that we have seen in this report.

"On JP Morgan's revised offer for Bear Stearns, the news is certainly helping the equity markets and supporting the dollar because this means less stress on financial markets."

MICHAEL KASTNER, HEAD OF FIXED-INCOME, STERLING STAMOS CAPITAL MANAGEMENT, NEW YORK:

"We had seen nothing but downtick after downtick, month after month" so it is positive for the market. "With the combination of the uptick in the Bear Stearns bid (by JPMorgan on Monday) and the uptick in existing home sales, we can see some positive headlines in the press" that will serve to buoy the markets.

IAN LYNGEN, INTEREST RATE STRATEGIST, RBS GREENWICH CAPITAL, GREENWICH, CONNECTICUT:

"Selling more homes cheaper -- too early to call that a bottom."

GREGORY MILLER, CHIEF ECONOMIST, SUNTRUST BANKS INC., ATLANTA: