NEW YORK (CNNMoney) — Home prices fell to their lowest point in more than a decade in January, which helped to lift the pace of home sales, according to a report from an industry trade group.

The National Association of Realtors reported that the median home price in January fell 2% from December to $154,700. That’s the lowest price reading since November 2001, before the run-up in home prices that became known as the housing bubble.

The median price is the point at which half of homes are sold for a higher price, and half are sold at a lower price. (Multi-million dollar foreclosures)

Serving as a drag on existing home prices is a large inventory of homes in foreclosure. Distressed home sales, which includes homes in foreclosure and so-called short sales in which the home is sold for less than what is owed on the mortgage, made up 35% of sales in January.

“Prices will continue to fall through the first half of 2012 due to the high share of distressed sales,” said Stuart Hoffman, chief economist with PNC Financial. “The recent agreement between the big mortgage servicers, state attorneys general and the Obama administration will also result in more homes going to foreclosure over the next few months, adding to downward pressure on prices.”

But the pace of sales rose to the highest level since May of 2010, helped by the low prices and rock-bottom mortgage rates. The seasonally-adjusted annual sales pace of 4.57 million homes was up slightly from the revised 4.38 million in December. The last time homes sold at that pace, buyers were rushing to qualify for an $8,000 homebuyer’s tax credit that was about to expire. The latest reading was roughly in line with the expectations of economists surveyed by Briefing.com.

“The uptrend in home sales is in line with all of the underlying fundamentals — pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents,” said Lawrence Yun, chief economist for the Realtors.

The housing market has been showing signs of recovery in recent months. The combination of low mortgage rates and a decline in home prices means homes are more affordable than they’ve been in decades. PNC’s Hoffman agreed that the report is a further sign of recovery in the market, although he cautioned “it will remain a long process.”

New home starts by builders have been rising, along with their confidence and customer traffic, according to an industry survey.

The supply of existing homes on the market tightened slightly in the Realtors’ latest report, slipping 0.4% to 2.3 million homes, roughly a 6 month supply. That is down 20% from the supply of homes a year ago.

NEW YORK (CNNMoney) — The U.S. mobile phone industry is running out of the airwaves necessary to provide voice, text and Internet services to its customers.

The problem, known as the “spectrum crunch,” threatens to increase the number of dropped calls, slow down data speeds and raise customers’ prices. It will also whittle down the nation’s number of wireless carriers and create a deeper financial divide between those companies that have capacity and those that don’t.

Wireless spectrum — the invisible infrastructure over which all wireless transmissions travel — is a finite resource. When, exactly, we’ll hit the wall is the subject of intense debate, but almost everyone in the industry agrees that a crunch is coming.

The U.S. still has a slight spectrum surplus. But at the current growth rate, the surplus turns into a deficit as early as next year, according to the Federal Communications Commission’s estimates.

“Network traffic is increasing,” says an official at the FCC’s wireless bureau. “[Carriers] can manage it for the next couple years, but demand is inevitably going to exceed the available spectrum.”

How did we get here?

The number-one biggest driver is consumers’ insatiable thirst for e-mail, apps and particularly video on their mobile devices — anywhere, anytime. Global mobile data traffic is just about doubling every year, and will continue to do so through at least 2016, according to Cisco’s (CSCO, Fortune 500) Mobile Visual Networking Index, the industry’s most comprehensive annual study.

The iPhone, for instance, uses 24 times as much spectrum as an old-fashioned cell phone, and the iPad uses 122 times as much, according to the Federal FCC. AT&T says wireless data traffic on its network has grown 20,000% since the iPhone debuted in 2007.

Video and mobile are breaking the Internet

“We got into this principally because technology and demand exploded at a rate that nobody had anticipated,” says Rory Altman, director of technology consultancy Altman & Vilandrie.

Another catalyst is the way the U.S. government allocated spectrum. The bands that wireless companies hold were broken up into small chunks across various markets, which was helpful in increasing competition in the 1990s.

But the patchwork nature has proven problematic for new technologies like high-speed 4G broadband. Bigger swaths of uninterrupted spectrum provide the larger amounts of bandwidth needed for delivering faster speeds.

One more contributing factor is that TV broadcasters and government agencies like NASA and the Department of Defense hold some of the best spectrum — relatively low-frequency radio waves that can travel long distances and penetrate buildings.

There are also businesses such as Dish Network (DISH, Fortune 500) that have large spectrum allotments but aren’t currently using them. (Dish is exploring its options for either using or selling its spectrum. A group of cable companies with unused spectrum recently struck a $3.6 billion pact to sell their holdings to Verizon in a deal that’s facing heavy regulatory scrutiny.)

The spectrum crunch is not an inherently American problem, but its effects are magnified here, since the United States has an enormous population of connected users. This country serves more than twice as many customers per megahertz of spectrum as the next nearest spectrum-constrained nations, Japan and Mexico.

When spectrum runs short, service degrades sharply: calls get dropped and data speeds slow down.

That’s a nightmare scenario for the wireless carriers. To stave it off, they’re turning over rocks and searching the couch cushions for excess spectrum.

They have tried to limit customers’ data usage by putting caps in place, throttling speeds and raising prices. Carriers such as Verizon (VZ, Fortune 500), AT&T (T, Fortune 500), Sprint (S, Fortune 500), T-Mobile, MetroPCS (PCS) and Leap (LEAP) have been spending billions to make more efficient use of the spectrum they do hold and billions more to get their hands on new spectrum. And they have tried to merge with one another to consolidate resources.

The FCC has also been working to free up more spectrum for wireless operators. Congress reached a tentative deal last week, approving voluntary auctions that would let TV broadcasters’ spectrum licenses be repurposed for wireless broadband use.

But freeing up more spectrum won’t be enough to solve the problem.

“There is no one solution that will address all the needs of the wireless industry,” says Dan Hays, a partner at PricewaterhouseCoopers who specializes in telecom issues.

The good news is that there are ways to buy time. Several innovative approaches are in the works, and there’s a decent amount of spectrum out there that could be turned over to the carriers’ possession.

The bad news is that none of the fixes are quick, and all are expensive. For the situation to improve, carriers — and, therefore, their customers — will have to pay more.

“For a while we won’t notice the quality of service changes, but over time as devices get better and use more data, we’ll start to take notice,” Altman says. “Consumers will notice it, and the burden will fall on the carriers to fix it.”

By Aaron Smith @CNNMoneyMarkets February 20, 2012: 12:43 PM ET

NEW YORK (CNNMoney) — Oil prices rose Monday after Iran cut exports to Britain and France, raising worries that higher gas prices may follow suit.

Iran’s oil ministry said Sunday that it would stop exporting oil to French and British companies. The announcement came just days after Iran threatened to cut supplies to some European Union countries in retaliation for sanctions put in place by the EU and United States.

U.S. crude for April delivery jumped nearly 2% to $105.08 per barrel. Brent crude, Europe’s benchmark, rose about 0.5% to $120.18 per barrel.

Prices for Brent haven’t been above $120 for more than a year, and that could prove worrisome for U.S. drivers since many U.S. refineries use imported oil to produce gas, especially on the East Coast.

Prices are already up nearly 9% from the start of the year. According to motorist group AAA, the national average price of $3.56 a gallon marks the 13th consecutive increase.

Gas prices may hit $5

The price of unleaded gasoline in the U.S. will likely hit a nationwide average of $4 by this summer, said Dan Dicker, oil trader and author of “Oil’s Endless Bid.” The last time prices topped $4 was 2008 and Dicker said there’s a one in three chance that gas could reach $5 a gallon.

If gas prices do head to those lofty levels, that could put a crimp in the economic recovery as consumers will likely cut down on spending if they have to pay more to fill up their cars.

Just last month, higher gas prices were to blame for an uptick in inflation. And it’s not just consumers who will suffer. Companies facing higher shipping costs may reel in their hiring plans, slowing job growth and putting a crimp into the overall economic recovery.

“This price juggernaut has taken on a life of its own since the Iran/Israeli threat flinging began and [the] boycott/sanctions war continues to ratchet upwards, and it’s been made worse by the big run in stocks since the start of the year,” said Dicker.

Capital Economics analyst Julian Jessop said the stock market rebound has contributed at least $5 worth of gains to the price of oil.

Israel has contributed to the market mayhem by openly considering an attack on Tehran’s nuclear infrastructure.

Iran exports 2.2 million barrels of oil per day, a sliver of the 89 million barrels that is consumed worldwide on a daily basis. Less than one-fifth of Iran’s exports are sent to Europe.

The move by Iran is “essentially an empty gesture, as the UK and France buy hardly any oil,” said Jessop in a client note.

Check gas prices in your state

But it doesn’t take much to trigger a fluctuation in prices, and even a bit player like Iran can wreck havoc on international markets.

“The supply is tethered so tightly to demand, that if you do lose even a small percentage of supply, it could have a big effect on the price,” said Dicker.

(ABC News)

The U.S. Post Office, facing financial losses of up to $18.2 billion a year by 2015, wants to charge more for postage, more for services, and to suspend Saturday delivery.

The 50-cent stamp would represent an 11 percent increase in postal rates.

USPS delivers 40 percent of the world’s mail. Its revenues exceed $65 billion a year.

The service said last week that it lost $3.3 billion last quarter, and that it is forecasting a loss of $14.1 billion for the year ending Sept. 30. Such losses, said the Postal Service in a letter sent last week to Congress, would be ”unsustainable” and would cause USPS to become “a burden” to the U.S. taxpayer. The letter called that outcome “highly undesirable.”

Currently, USPS gets no taxpayer dollars for its operating expernses, which are funded by the sale of postage and postal services.

Suspending Saturday delivery would save $2.7 billion a year, the Postal Service says. Raising the cost of first-class postage to 50 cents would increase  annual revenues by $1 billion.

The post office’s chief financial officer said  USPS is the least expensive major postal service in the world, and that its services are “clearly underpriced.”

The last postal increase occurred late last month, when the cost of mailing a first-class letter rose from 44 cents to 45 cents. Rates also rose for packages, for  periodicals, and for a wide variety of services.  The law limits USPS increases overall to the rate or inflation, or 2.1 percent a year.

Before the January increase, USPS first-class rates held steady for two and a half years.

To raise revenue, the Postal Service has introduced new products. In 2012, they include  Package Intercept:  For $10.95 (plust Priority Mail postage), a customer can intercept and recall a package already sent  before it reaches its destination.

NEW YORK (CNNMoney) — The healthcare company McNeil is recalling more than half a million bottles of Infants’ Tylenol because of consumer complaints about the difficulties of using the dosing system.

McNeil is recalling about 574,000 bottles after receiving a “small number” of complaints regarding the so-called “dosing syringe” of the orally-administered over-the-counter painkiller. The company said that in some cases the “flow restrictor was pushed into the bottle when inserting the syringe.”

The recall applies to one-ounce bottles of grape-flavored Infants’ Tylenol Oral Suspension.

The company said there have been “no adverse events” from the problem and that “the risk of series adverse medical event is remote.”

Drug shortages at all-time high

The company said that consumers can continue to use the product, despite the voluntary recall, so long as the flow restrictor remains in place at the top of the bottle.

McNeil, a subsidiary of Johnson & Johnson (JNJ, Fortune 500), has had numerous recalls in the recent past, especially with Tylenol.

The U.S. government took over three Tylenol plants last year for failure to comply with federally-mandated manufacturing procedures.

FORTUNE – On Thursday morning, Washington lawmakers were pleased to announce a deal to extend a cut in payroll taxespaid by most Americans.

The compromise was reached ahead of the tax cut’s March 1 expiration date, and will keep the tax rate at 4.2% from its usual 6.2% for another year. So for a family earning $50,000 a year, that would translate to a savings of about $1,000 a year or roughly $80 a month.

But don’t expect that extra money to be plowed back into the economy.

Too often the tax cut is presented as a way to give the nation’s fragile economy an extra boost (it’s one of the key planks in President Obama’s jobs program announced last September). After all, the thinking goes, about 70% of the U.S. economy is based on consumer spending. Workers who take home more of their pay will likely spend it on everything from restaurant outings to movie tickets. And because the pay bump goes largely unnoticed, workers would likely spend much, if not all of it, rather than save it.

But because the tax cut only extends cuts that workers’ previously enjoyed, it isn’t expected to generate much additional spending. It’s not to say the tax cut is unnecessary, but we should see it as more of a cushion for the economy than a stimulus for it.

And there’s a dark cloud on the horizon that could erase any benefit from the payroll tax cut extension: Rising gas prices.

Since the end of 2011, the national average for a gallon of regular gasoline is up more than 8% to $3.52, according to data released on Monday by the U.S. Energy Information Administration. Gas prices tend to increase during the first half of the year, but this is the earliest the average price per gallon has surpassed the $3.50 mark. Prices at the pump could break $4 later this year – typically the point where fuel costs start eroding economic growth, says IHS Global Insight economist Chris Christopher.

Last year gas prices approached $4, hitting an average of $3.98 in April before falling. And it was around that time when some economists noticed fuel prices were eating away at consumers.

Though prices haven’t reached the $4 mark, consumers are nevertheless feeling the pressures from a higher bill at the pump. In his daily newsletter on Wednesday, Gluskin Sheff chief economist David Rosenberg pointed that one of the big drivers of relatively strong retail sales in January were escalating prices on food and fuel. Gasoline sales rose 1.4%, the steepest increase since last March. Grocery bills also rose 1.3%, the largest jump since August 2010.

“Strip out these two areas, sales barely rose at all last month – by less than 0.1% versus an average advance of 0.5% over the prior three months, and the weakest showing since last May.”

Given expectations of rising prices, it’s hard not to wonder if Washington policymakers should expand the tax cut further, or perhaps even focus on deeper cuts for lower-income households, which some economists say are more likely to spend their extra cash instead of saving it.

For months, there’s been much drama over the tax cut. Earlier this week, Republicans gave up their long-held stance that the reduction had to be paid for with spending cuts elsewhere. Though Democrats probably feel they’ve won and Republicans think they no longer look like the bad guys to the middle class, particularly amid an election year, it remains to be seen who else might come out as winners.