WASHINGTON (Reuters) - Sales of previously owned homes cooled in February compared to January but the housing market much more buoyant than economists had expected, a realtors' group said on Monday.

The National Association of Realtors said the seasonally adjusted annual rate for existing homes fell by 0.4 percent to 5.18 million last month. That was down from 5.20 million in January but the January figure was revised upward from a previously reported 5.13 million.

Despite the slowdown in February, sales easily outpaced the 5.05 million in sales forecast by U.S. economists in a Reuters survey.

``This report is consistent with the other major housing measures in recent months. Housing activity remains extraordinarily strong early into this year,'' said NAR's chief economist David Lereah.

Long-term interest rates have fallen more than a percentage point in the last year, giving a boost to the housing market. Even as areas of the economy like manufacturing are suffering, the housing market still appears to be firing on all cylinders.

``We estimate that for every 1 percent drop in mortgage rates, approximately 250,000 families and/or individuals qualify to purchase a home which they would not have qualified otherwise,'' Lereah said.

NAR noted that the February sales pace was only about 5 percent below the all-time high.