New-home sales continued to fall in February as prices took another tumble, the Commerce Department reported Wednesday.

New-home sales dropped 16.9 percent last month—the third consecutive monthly decline. New-home sales were at a seasonally adjusted annual rate of 250,000 homes; economists view a 700,000 a year pace as healthy for the sector.

The median price of new homes dropped nearly 14 percent to $202,100—its lowest level since December 2003.

The new-home market has been pummeled by the sluggish housing market in recent years as it tries to compete against low prices and a huge inventory of foreclosures on the market.

A turnaround in the new-home market may not come for another three years, analysts say.

Residential construction continues to slow nationwide. Builders started on fewer homes last month than in nearly two years as building permits fell to their lowest level in more than 50 years.

Source: “Sales of New Homes Plunged in February to Record Low; Median Price Tumbled to $202,100,” The Associated Press (March 23, 2011)