Pending U.S. home sales tumble, optimism crumbles

By Joanne Morrison

WASHINGTON (Reuters) - Pending sales of previously owned U.S. homes fell to a record low in February and consumer confidence hit a new low this month, according to reports on Tuesday that heightened recession fears.

The National Association of Realtors' Pending Home Sales Index, based on sales contracts signed in February, dropped a bigger-than-expected 1.9 percent to 84.6 from January to the lowest level on record dating to 2001.

Separately, Investor's Business Daily and TechnoMetrica Market Intelligence said their consumer optimism index showed confidence at its weakest since they began tracking it in 2001.

"I think if you are looking at job growth, now negative, and consumer spending is going to slow, to me it's a recession," said Joseph LaVorgna, chief economist at Deutsche Bank in New York.

Compared with February 2007, pending home sales were down 21.4 percent, according to the real estate trade group.

U.S. Treasury bond prices were up slightly in late morning trades, while the Dow Jones industrial average .DJI was down nearly 30 points.

Economists polled ahead of the housing report were expecting a decline of 0.7 percent. While February's reading was worse-than-expected, January's index was revised up to show a 0.3 percent gain after an initial flat reading.

"The data suggest we haven't really seen a bottom yet in the housing market," said Scott Brown, chief economist at Raymond James & Associates in St Petersburg, Florida.