Independent UK: House price slump in US dashes hope of end to credit crisis

[marmar]

House price slump in US dashes hope of end to credit crisis
By Stephen Foley in New York
Wednesday, 26 March 2008


Declines in US house prices are continuing to accelerate, according to surveys that signal there will be no quick end to the credit crisis.

The price of the average home was 11 per cent lower than a year ago, the S&P Case-Shiller index showed yesterday, as repossessed homes flood the market – and economists predict that the price adjustment may belittle more than half over.

The Case-Shiller index has become one of the most widely followed measures of the US economy because American homes are the collateral that supports hundreds of billions of dollars of mortgage-backed securities and other credit derivatives.

The latest figures cover house prices in 20 metropolitan areas in January, and show that price declines have spread far beyond the once-hot speculative property markets in Florida and the South-west and crumbling industrial towns. Now, Charlotte, North Carolina, is the sole region showing year-on-year gains.

The year-on-year decline of 10.7 per cent in the average house price is worse than anything seen in the last downturn in the early Nineties. Prices fell 2.4 per cent in just one month.

"It does not look like early 2008 is marking any turnaround in the housing market,," said David Blitzer, S&P index committee chairman. "Home prices continue to fall, decelerate and reach record lows across the nation. No markets seem to be immune from the housing crisis." .......(more)

The complete piece is at: http://www.independent.co.uk/news/business/news/house-price-slump-in-us-dashes-hope-of-end-to-credit-crisis-800674.html

[LisaM]

1. Houses were overpriced.

I'm sorry, but that's the sad truth. I have not been able to afford a house, and will not unless they go down a lot more. And I make a decent living. I'm not rich or anything, but the Seattle housing market is completely out of reach for me.

[ananda]

2. Housing prices..

.. should never have gone up that
high in the first place.