INSTANT VIEW: Reaction to new home sales data

NEW YORK (Reuters) - Sales of new single-family U.S. homes fell 1.8 percent in February while the median sales price was down from a year ago and inventories fell modestly.

KEY POINTS: * The pace of sales fell to an annual rate of 590,000 from an upwardly revised rate of 601,000 in January, the Commerce Department said. * Economists polled by Reuters were expecting February sales to fall to a 580,000 rate from the previously reported rate of 588,000 in January. * The inventory of unsold homes fell 2.1 percent to 471,000 which, at the current sales pace, would take 9.8 months to clear and matched the months' supply in January. * The February median sales price for a new home was down 2.7 percent from the year-ago level. Still, the median home price was up 8.2 percent to $244,100 in February from the $225,600 of the previous month.

COMMENTS:

T.J. MARTA, FIXED INCOME STRATEGIST, RBC CAPITAL MARKETS, NEW YORK:

"The market continues to correct, both in terms of sales volume and price, and the high inventories indicate that this correction has months and quarters to run in terms of the drag on residential investment."

TOM SOWANICK, CHIEF INVESTMENT OFFICER, CLEARBROOK FINANCIAL LLC, PRINCETON, NEW JERSEY:

"Home sales are better-than-expected and last month's number was revised higher as well. The interesting fact is that weekly loan applications for new purchases all rose by 10.6 percent, so today's better-than-expected home sales looks sustainable."

JAMES O'SULLIVAN, ECONOMIST, UBS SECURITIES LLC, STAMFORD, CONNECTICUT:

"It shows that sales are still slipping albeit from a slightly upwardly revised level. There is no evidence that sales are rising.

Some housing data are showing signs of stabilization like the latest MBA data. You are getting closer to a bottom.

The month's supply held but when you look at the details, it does show that home builders are getting in front sales. Starts have slowed enough that inventories are starting to edge down.

We do think we are in recession here. The trend in construction is still down. Capital goods shipment and orders are all pointing to fact we are in recession.

For us to see an end to a recession by the second half, we hope to see a stabilization in housing in the next couple of months."

DAVID SLOAN, ECONOMIST, 4CAST LTD, NEW YORK:

"The numbers are marginally higher than expected on the sales, but I wouldn't read too much into it. We have an upward revision to the previous month but not a very big revision. The numbers really are not very far off of expectations. The downtrend still seems to be there, although it may be moderating a little. The new home sales are not as strong as the existing home sales -- the existing home sales probably overstated and the trend is still negative, but there are suggestions maybe the trend is becoming a little less sharply negative. We can be sort of cautiously encouraged that the trend is becoming a little less negative. I don't think there are really any signs of a revival in the housing market. The Fed is not going to get particularly excited by these numbers -- things aren't declining perhaps as fast as they were, things maybe look a little less awful, but they are still pretty bad."