WASHINGTON - March 21, 2011 - Sales of previously owned U.S. homes plunged in February and prices hit their lowest level in nearly nine years, implying a housing market recovery was still far in the future.

The National Association of Realtors said on Monday sales fell 9.6% month over month to an annual rate of 4.88 million units, snapping three straight months of gains. The percentage decline was the largest since July.

Economists polled by Reuters had expected February sales to fall 4.0% to a 5.15 million-unit pace from the previously reported 5.36 million unit rate in January. January's pace was revised up slightly to 5.40 million.

"This is a frustrating number. The U.S. residential real estate market doesn't seem to want to turn around despite better affordability," said David Carter, chief investment officer at Lenox Advisors in New York.