S&P’s reports further decline in US house prices

| April 28, 2009 | 0 Comments
S&P’s reports further decline in US house prices

According to the Standard & Poor’s/Case-Shiller Home Price index, house prices in the US continued to fall in February, albeit the rate of decline is slowing.

The Index shows that for the month, the price of single-family homes in 20 of the largest cities in the US fell 18.6% compared with a year ago and follows a record drop of 19% in January.

On a regional basis, house prices in Phoenix have plummeted more than 50% from their high, while Las Vegas prices are down almost 50% from their peak. A fall of 45% has been recorded in Miami from their highest levels, while Los Angeles and San Diego have experienced falls of 40%.

Economists believe house prices in the US have further to fall since rising unemployment is deterring Americans from buying a new home.

Many believe prices will fall a further 5%-10% before reaching a low, while others believe they could plummet by a further one third.

The National Association of Realtors say the average price of a home in the US is now $175,200, down from $230,000 in 2006.

In related news, earlier this month, the US Commerce Department revealed that new housebuilding fell sharply in March.

On an annual basis, housing starts are down nearly 50% as builders mothball building projects for fear of falling house prices.

According to economists, recovery of the US housing market is crucial to the overall recovery of the world’s largest economy.

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