Sales of previously owned U.S. homes jumped to a two-year high last month, according to data on Friday. The National Association of Realtors said sales of existing homes jumped 9.4 percent in September to an annual rate of 5.57 million units, the highest level since July 2007.

Financial markets had expected sales to rise to a 5.35 million unit pace after a surprise decline in August. Sales were partly driven by first-time buyers rushing to take advantage of the government’s popular $8,000 tax credit, which is due to expire at the end of November. Sales were up 9.2 percent compared to September of last year.

Recall the housing sector’s collapse and subsequent global credit crisis helped to push the U.S. economy into recession at the end of 2007. The downturn was the worst in 70 years.
The housing market is now crawling out of a three-year slump and analysts believe home building probably contributed to economic growth in the third quarter, which would be its first positive contribution since the end of 2005.

Signs of recovery in the housing market, coupled with other fairly upbeat data, strongly suggest the economy started growing again last quarter for the first time since the second quarter of 2008. The government will release data on third-quarter gross domestic product next week.

Sales for both new and previously owned homes have been boosted by a combination of the tax credit, depressed prices and low mortgage rates.

There are worries the expiration of the tax credit could hamper the recovery, however, and many lawmakers want to extend the program, with some pushing to expand it to all buyers. The tax credit has so far cost the government about $10 billion and the Obama administration has yet to decide whether it will back an extension, weighing it against the impact it will have on an already bloated budget deficit.

In the market after high home sales, the euro-dollar pair plummeted strongly on the four-hour and one-hour charts and may plunge further to the downside, it trading at 1.5006 recording a high of 1.5060 and a low of 1.4989.

As for the pound-dollar pair, it is declining as well as the dollar is advancing slightly in front the royal pound that is so far trading around 1.6305 recording a high of 1.6692 and a low of 1.6297.

Now, turning to dollar-yen pair, it is inclining as the dollar reached a 1-month against the low-yielding Japanese currency, having actually the yen trading so far at 92.03 recording a high of 92.11 and a low of 91.26.