American Housing Market in further Decline
The number of house sales in US fell 2.6 per cent in the year to April 2007. There is now a backlog of homes not being sold; supply is greater than demand. The average selling price for homeowners who do find a buyer has also started to fall.
There is little evidence that the worst of the US housing market recession is over. The collapse in the sub prime market means that banks and building societies are no longer lending to people with bad credit histories. This is a big chunk of the market.
Furthermore, many with existing mortgage deals will soon becoming to the end of their introductory rates, therefore, in a few months there will be an increasing number of people who struggle to meet their mortgage payments. Many mortgage experts predict a continued rise in the number of home repossession.
There are concerns the recession in the US housing market may be mirrored in the UK. Although, house prices in the UK had a similar exponential rise, at the moment demand is still greater than supply. Also, the sub prime market in the UK is much smaller.
Labels: US housing market