Existing-home sales fell 3.7% to an annual rate of 5.48 million, the National Association of Realtors said, worse than expected.
Economists had expected a drop to 5.555 million after resales soared to their fastest pace of the recovery in January.
Existing-home prices rose 7.7% vs. a year earlier to $228,400.
A separate FHFA home price gauge showed existing-home values were flat in January vs. December, the weakest since November 2013 and far below views. The 5.7% annual gain was the smallest in 2-1/2 years.
The supply of existing homes on the market fell 6.4% vs. a year earlier, the 21st straight month of declining inventories.
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"Low supply in the affordable price range continues to be the pest that's pushing up price growth and pressuring the budgets of prospective buyers," said Lawrence Yun, NAR chief economist.
But limited inventory is good news for new-home sales and prices.
February sales closings likely were signed in the month or two prior. Mortgage rates have been consolidating in an up-and-down fashion since a postelection spike to mid-December. Rates were hitting recent peaks until the Federal Reserve decision to accelerate future tightening after raising rates on March 15.
Homebuilder stocks were emerging market leaders in 2017 despite the higher rates, then jumped last week as Treasury yields fell.
Homebuilder stocks were generally moderately lower in the stock market today after falling hard with the major averages on Tuesday. Lennar (LEN) fell 1.1% to close at 50.71 in the wake of Wednesday's existing-home sales report. On Tuesday, Lennar retreated 2.7% as it reported lower but better-than-expected earnings Tuesday morning.
KB Home (KBH) inched down a penny to 19.11, while Toll Bros. (TOL) edged down 7 cents to 35.76. KB Home reports earnings late Thursday. D.R. Horton (DHI) retreated 0.5% to 32.98.
Smaller builder Taylor Morrison (TMHC) sank 4.6% to 20.85, dropping below a 21.14 buy point cleared last week. Taylor Morrison said before the opening bell it will sell 10 million shares, using the proceeds to buy back partnership units and class B stock owned by various private equity firms.
Ahead of KB Home's earnings, the Commerce Department will release February new-home sales data.
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