Updated from 1:07 p.m. ESTTreasuries fell Thursday on a stronger-than-expected existing-home sales report, the first of this week's two key readings on housing market health, after catching a break early in the morning after initial jobless claims remained above 300,000 for the third week in a row. Most recently, the benchmark 10-year note was down 8/32 to yield 4.73%, while the 30-year bond fell 13/32 to yield 4.73%. Bond prices and yields move in opposite directions. The two-year edged lower 2/32 to yield 4.76%, and the five-year lost 5/32 to yield 4.73%. The National Association of Realtors said that existing-home sales rose by 5.2% in February to a seasonally adjusted annualized rate of 691 million, the largest rise in two years and vs. expectations for annualized sales of 6.52 million. Moreover, the supply of unsold homes also rose by 5.2% in the month to 3.03 million, close to the all-time record of 3.04 million posted in 1986; median prices are now up 10.6% year on year to $209,000. Peter Cardillo, chief market analyst at SW Bach & Co. believes the strong report was an anomaly due in large part to unseasonably warm weather, and that ultimately the housing market is weakening. "But we're heading into an FOMC meeting ... and this obviously throws into question how far the Fed needs to tighten," Cardillo says. The bond market has kept a close eye on housing because economists believe the Fed won't stop raising interest rates until housing growth slows enough to rein in economic growth. A broad cooling in the housing market received support overnight from KB Homes ( KBH), which said that first-quarter orders fell by 12% even though it posted a 42% jump in profit. "