September home sales showed mixed trends, but year-over-year foreclosures starts were down, suggesting some market recovery, according to the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Treasury's October Housing Scorecard.

Sales of new homes totaled 26,100 in September, up 5.7 percent from 24,700 in August, but down slightly from 26,300 during the same period in 2010. Existing home sales totaled 409,200 in September, down from 421,700 in August, but up from 367,500 in 2010. First-time homebuyers rose in September to 217,000, up from 196,900 a year earlier.

There were 70,700 foreclosure starts in September, down from 78,900 in August and down 31 percent from 102,400 in September 2010. Foreclosure completions slowed, falling to 65,000, down from 64,800 in August and 102,100 in September 2010.

Last month we saw a continued fall in mortgage defaults, due in part to our foreclosure prevention programs reaching more borrowers upstream in the process. And in the last quarter, a million more homeowners refinanced their loans under some of the lowest interest rates in history, said Raphael Bostic, HUD's assistant secretary, in a statement.

Interest rates are around 4 percent, near a record low, according to Freddie Mac.

But despite these signs of progress, we have much more work to do to reach the many households who still face trouble and to help the market recover, said Bostic.

HUD reported 5.3 million mortgage modifications between April 2009 and the end of September.

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