Grim figures out of the housing market in the United States emerged yesterday. According to the National Association of Realtors, sales of existing homes dropped 27.2 percent in July to reach their lowest level in ten years.

The July plunge comes after an end to the tax credits that have sustained housing sales through the economic doldrums of the 2008 financial crash. It stands as more evidence that underneath all of the government money swirling around and stimulating the US economy, there is an extremely fragile economic recovery.

The Dow fell 122 points on the news, and the still-tottering housing market is sure to be interpreted as a high profile failure for the Obama administration going into mid-term elections in November.

Around the internet, the Wall Street Journal claims that softness in the US housing market is here to stay:

“Mortgage rates remain low, but lingering troubles in the labor market continue to restrain the nation’s housing recovery. That trend likely will continue for some time.”

A contributor to Bloomberg provides the following rationale for the plunge:

“Demand is low across the country,” Richard Dugas, chief executive officer at Pulte Group Inc., said in an Aug. 20 interview with Bloomberg Television. “You have record-low interest rates and excellent pricing, but consumer confidence eased. We really need the economy to improve and job creation to take hold before people feel comfortable stepping into a home.”

The article also reveals what the Obama administration plans to do about boosting market confidence:

“To help prop up the market, the Obama administration will offer $1 billion in zero-interest loans to help homeowners who’ve lost income avoid foreclosure as part of $3 billion in additional aid targeting economically distressed areas.”