According to NAR, reported September existing home sales were 4.53 million units which was 10% higher than the last month revised rate of 4.12 million units. Countering this good news, the bad news for home owners is that the median price dropped 3.3% to $171,700 and the average price moved down 3.5%, placing it at $218,200.
NAR views this as positive news calling the increase in sales part of the "natural healing process" necessitated by the end of the government stimulus. The problem with this interpretation is that the drop in prices will force more mortgages into an upside-down position. This will probably cause an increase in foreclosure activity, provided that questions over the massive mortgage mess and foreclosure irregularities are answered in a timely fashion. (Personally, I'm of the opinion that the mortgage mess and foreclosuregate won't be straightened out easily or quickly.)
To place some perspective on the 4.53 million units of sales, it is the 3rd worst number in history according to my sources. So, to call it good news simply because it was higher than expected, is somewhat of an exaggeration. This interpretation is based on the statistic that 35% of the existing sales were distressed, which is a 1% increase over August's numbers. Now that the foreclosuregate scandal is gaining more publicity the numbers for next month may well be distorted due to the slow-down in foreclosure activity, related court cases impacting banks ability to sell REOs, and title companies suddenly deciding that there is too much liability involved to make them feel secure about insuring REO sales.
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