USD Rallies After US September Existing Home Sales Fall While Prices Rise
The pace of U.S. home resales declined in September though it remained near a two-year high, as limited supply of houses up for sale drove prices higher. The National Association of Realtors (NAR) reported today that existing home sales fell 1.7 percent to a seasonally adjusted annual rate of 4.75 million in September from an upwardly revised 4.83 million the previous month. The latest reading matches the median forecast of 78 economists surveyed by Bloomberg News.
The median home price rose 11.3 percent from a year earlier to $183,900, the largest gain in prices since 2005, as inventories declined. The supply of homes for resale fell to 5.9 months from 6 months, the lowest since March 2006.
These latest figures suggest that the housing market is on its way to recovery, as more Americans take advantage of record low mortgage rates. A report released on Wednesday showed that building permits and housing starts surged in September to their fastest pace in over four years. On the other hand, stagnant wage growth and elevated unemployment will likely continue to pose challenges for the industry.
USDJPY 1-minute Chart: October 19, 2012
Chart created using Market Scope – Prepared by Tzu-Wen Chen
In the initial minutes following the release of the housing report, the U.S. dollar strengthened against the Japanese yen. At the time this report was written, the USDJPY pair was trading higher at 79.34 yen.
--- Written by Tzu-Wen Chen, DailyFX Research
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