Sales of Existing US Homes Probably Decreased in September - BusinessWeek

Jobless claims data from the Labor Department may show scant improvement in the pace of dismissals. Growing pessimism about the economy, unemployment above 9 percent and limited access to credit are keeping some Americans from taking advantage of near record-low mortgage rates. Foreclosures that are adding to the supply of Homes for Sale and driving down prices remain a hurdle for an industry that’s made little progress more than two years after the recession ended. Initial applications for unemployment insurance payments fell to 400,000 in the week ended Oct. Home Prices A glut of distressed properties on the market is holding down prices, keeping housing from contributing to the economic rebound. Default notices rose 14 percent in the third quarter from the prior three months, a sign lenders may be speeding up the repossession process, RealtyTrac Inc. Foreclosure filings declined 34 percent in the third quarter from a year earlier as states continued to probe allegations of foreclosure “robo-signings” and lenders scrutinized paperwork, according to RealtyTrac. Housing prices keep falling even in the face of near-record low lending rates. The S&P/Case-Shiller index of property values in 20 cities dropped 4. Mortgage Rates The average rate for a 30-year fixed loan dropped to 3. Cheaper borrowing costs may help explain why homebuilders were less pessimistic in October. Readings less than 50 mean more respondents said conditions were poor. Bernanke said Oct 4 that the central bank was ready to take further steps to boost an economy that he said was “close to faltering. He said “the overhang of distressed and foreclosed properties, tight credit conditions for builders and potential homebuyers, and the large number of ‘underwater’ mortgages” have hurt home construction. Homes for Sale