Existing-home sales fell by almost 3% in January to their weakest level in almost two years, according to figures released Tuesday morning by the National Association of Realtors.Compared with resales in the same month a year ago, the performance was even worse -- down 5.2% (to 6.56 million units, annualized) with the Northeast taking the most severe hit, 13.2%. Moreover, the supply of existing homes has risen by a startling 43% over the past 12 months. The trade group says there is now a 5.3-month supply of housing in the United States. Scott Anderson, senior economist for Wells Fargo & Co., described the situation as a "housing glut" but said his biggest concern is declining home values. He said a drop in prices will lead to a shutdown of the "home equity fountain of youth." Mr. Anderson said he believes consumers have kept the U.S. economy chugging along despite higher energy costs by tapping home equity.

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