So much for that recovery we keep hearing about:

WASHINGTON (AP) – The number of people who bought previously owned homes last year fell to the lowest level in 13 years, and economists say it will be years before the housing market fully recovers.

High unemployment and a record number of foreclosures are deterring potential buyers who fear home prices haven’t reached the bottom. Job growth is expected to pick up this year, but not enough to raise home sales to healthier levels.

“We built too many houses during the boom, and now after the crash, it will take us a long time to get back to normal,” said David Wyss, chief economist at Standard & Poor’s in New York.

The National Association of Realtors reported Thursday that sales dropped 4.8 percent to 4.91 million units in 2010. That was slightly fewer than in 2008, which had been the weakest year since 1997.

The poor year for sales did end on a stronger note. Buyers snapped up homes at a seasonally adjusted annual rate of 5.28 million units in December, the best sales pace since May and the 12.8 percent rise from November was the biggest one-month surge in 11 years.

Gains in mortgage rates may have spurred some fence-sitters to buy homes in December before rates moved higher, analysts noted.

The increase was an encouraging sign after a dismal year for home sales, said Mark Zandi, chief economist at Moody’s Analytics. But he cautioned against raising expectations for a rapid recovery in housing.

“The job market is still very weak, and unemployment is very high. Until we get more jobs, people will be reticent about buying homes,” he said.

This is only a surprise to people who haven’t been paying attention. We have not hit the bottom of the housing market by any means and most houses are still over valued. The days of buying a home as an investment are over, we need to go back to thinking of a home as a place we want to live.