More Bad News for U.S. Housing Market
The latest S&P/Case-Shiller U.S. National Home Price survey showed a much weaker than expected rate of price increase, a mere 1.7 percent in August. Furthermore, in the 20 major urban housing markets incorporated in the Case-Shiller index, prices declined by 0.2 percent from the previous month.
The past several months reveal that since the termination of the federal homebuyer tax credit program, which artificially propped up the American housing market, U.S. residential real estate has continued its trend of price contraction. In the past four years U.S. home prices have fallen by 28 percent. The consensus view is that the latest S&P/Case-Shiller report is gloomy in the extreme, pointing to further erosion in U.S. home values, with many more Americans falling under water with their mortgages as their home equity collapses. Not a hopeful sign that the global economic crisis will soon end.
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