Existing Home Sales Plummet in September

In a sign that the US housing market will likely take some time to recover, sales of existing homes surprisingly plummeted in September, according to the National Association of Realtors’ index of pending homes resales released Friday.

The report showed sales fell by 1.8 percent in the month, following a revised 4.4 percent gain in August. Compared with September 2009, sales are down a staggering 25 percent. Progress is being limited, industry insiders say, by moratoriums on foreclosures and tighter lending criteria.

Sales have somewhat steadied, however, since the expiration of federal homebuyer tax credits in April sparked a dramatic 32 percent plunge in the data. Though mortgage rates are at or near record-lows, prices are being held down by continued high levels of foreclosures and the nation’s unemployment rate of 9.6 percent is buffering demand.

A report from the Labor Department on Friday indicates that the nation’s employers may finally be ready to increase hiring. US payrolls increased by more than 150,000 in October, according to the report, far exceeding estimates of even the most optimistic analysts. The report also indicated workers are getting more hours and earnings are up, on average, as well.

Treasury notes fell and the US dollar strengthened on the report. The yield on a ten-year Treasury, which adjusts inversely to its price, climbed 2.53 percent by mid-day Friday from 2.49 percent at the end of Thursday’s session. The dollar, meanwhile, rose from $1.4207 per euro late Thursday to $1.4062 in the middle of Friday’s session.