The housing market has hit a new bottom, the National Association of Realtors said yesterday after reporting that sales of existing homes fell 8.4 percent in March from February, the sharpest drop in 18 years and an alarming sign for the spring season.

"This was very disappointing," said NAR chief economist David Lereah, who added that the new figures have led him to revise his outlook downward. "There's no way you can spin this news." Lereah had previously said the housing market had bottomed out in September and was starting to recover.

"We expect home sales to drop nearly 10 percent in the coming months, before turning around in the first half of 2008," said Patrick Newport, chief U.S. economist for Global Insight.

Harsh winter weather kept some home shoppers indoors. But the bigger problem for many potential buyers is that they couldn't get a loan. Lenders, startled by the many people with adjustable-rate mortgages who have defaulted, have been tightening the standards to qualify.

Worst hit are buyers with little cash for a down payment, or with low, or "subprime," credit scores.

"I've got at least one or two home buyers a week who can't get a loan but would have had one six months ago," says Pava Leyrer of Heritage National Mortgage in Grandville, Mich.

In Mequon, Wis., "at least 30 percent of the subprime people I'm dealing with who want to buy a home, I can't help," says John Stearns of Robbins and Lloyd Mortgage. "I'm telling them to build their credit up."

With fewer buyers qualifying, homes are sitting longer. At the current sales rate, there's a 7.3-month supply — the most since October.

Sales last month fell to a seasonally adjusted pace of 6.12 million, the largest decline since January 1989. The weakness came from sales of single-family homes, which dropped 9.5 percent from February.

The median home price (half sold for more, half less) edged down for the eighth straight month, to $217,000, off 0.3 percent from March of last year.

Slower home sales, higher gas prices and consumer pessimism, pose threats to the overall economy, warns Joel Naroff of Naroff Economic Advisors. "We don't have a bottom in housing, we don't have a top in gas prices," Naroff says. "That doesn't bode well for growth going forward."