US home prices dip for 4th month in row

As foreclosed homes flood the markets, prices could tank even further.

Source: Press TV
http://www.presstv.ir/detail/162028.html

A double-dip in the US home prices appears to be underway in America's biggest cities, endangering an already fragile economic recovery in the country.

Home sale prices fell 1.6 percent for the fourth consecutive month in November 2010, the Standard & Poor's/Case-Shiller Index, which tracks the real estate market in 20 major US cities, showed.

The housing market got a boost early last year with the help of tax incentives. But after the US government's initiatives ended, sales dropped sharply.

Falling home values result in what economists call a negative wealth effect. In this scenario, people's financial confidence is shattered as a result of lost equity in their homes.

Currently, there are more than ten million households in the United States who owe more on their homes than they have equity.

Some economists predict the US housing price, which is a key indicator of the country's economic vitality, will drop by as much as 20 percent this year.

According to their reports, the decline in home value is greater than it was in 1928 to 1933 during the Great Depression -- a severe worldwide economic depression in the decade preceding World War II.

In addition, unemployment has remained stubbornly high and millions of Americans are still at risk of foreclosure.