Housing troubles put a dent in U.S. auto sales

DETROIT -- Automakers sold nearly 80,000 fewer cars and trucks last month than in February last year, a 6.3% drop. Housing and economic woes kept buyers at home, even as automakers stepped up incentives to try to rescue flagging sales.

A rebound is not yet in sight as the housing shakeout continues to reverberate through the auto industry. Markets where home prices have been hit hardest, such as California, are also where auto sales are taking a beating.

Still, the appetite for deals is back up.

"Business was tough all month," says Mark LaNeve, General Motors' vice president of North American sales, service and marketing. "Although we did close strong at the end of the month. … Buyers came in looking for a deal."

In this tough market, incentives will likely keep rising, says Jessica Caldwell, an analyst at auto information site Edmunds.com.

"A lot of the automakers said they were trying to decline incentive spending, but what we're seeing is them slowly creeping back up," says Caldwell. "For a lot of brands, because it's going to be a really tough year, if January and February are any indications, (incentives) are probably going to keep increasing."