Tuesday, March 22, 2011

US home prices hit 9-year low

Source: Press TV

A report by the US National Association of Realtors shows that home prices in America have dropped to their lowest level in nearly nine years.

According to the association, home prices plunged nearly 10 percent in February, a Press TV correspondent in Washington reported on Monday.

Nearly four million US homes are likely to be lost in foreclosures by 2012, says the report. That is in addition to nearly seven million homes that have already been foreclosed because owners could no longer afford to make the monthly mortgage payments.

“We are heading for a double dip in the housing market at the national level; actually we are already there,” economist Jacob Kirkegaard told Press TV.

The Americans do not feel that they are out of the recession yet and “that is going to affect their willingness to go and consume, their willingness to take risks, starting new businesses, and it is basically going to perpetuate these very poor economic conditions,” he added.

A new Gallup poll has revealed that nearly three out of every four Americans say they are a lot more worried about the economy than other issues in America.

According to the US Department of Labor, things are not much better in the job market, with unemployment climbing in nearly all major cities in the United States.

“We need to get in two to three thousand new jobs per month to really create a self-sustaining recovery at the job market, and we are clearly not there yet,” Kirkegaard said.

“You do not have the construction sector; you have lower consumer spending, and as a result of that, you have lower business spending. So, that is really the link,” he pointed out.

Kirkegaard predicted that the shadow inventory of foreclosed homes will continue to pull down the US economy for another 12 to 18 months

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