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US home sales and prices falling at record levels
THE US housing market took a sharp turn for the worse in new data this week, in sign the US recession that shows no sign of abating. Existing US home sales and prices both fell at a record pace last month, according to a report released on Tuesday, further evidence that the financial turmoil which intensified in September was driving consumers deeper into retreat."The quickly deteriorating conditions in the job market, stock market and consumer confidence in October and November have knocked down home sales to another level," said Lawrence Yun, chief economist for the National Association of Realtors in the US. Sales of newly built US homes slowed to the weakest level since 1991, according to separate figures from the Commerce Department. Housing is at the root of the year-long US recession and the global malaise, and economists see little hope of a lasting recovery until that market stabilizes. If it deteriorates significantly, that would increase foreclosures and bank losses, putting greater strain on government efforts to revive growth. "The bottom line: Bah humbug. Recession, recession, recession," said Jennifer Lee, an economist with BMO Capital Markets in Toronto. Modest US stock market gains evaporated after the housing data was released, pushing the Dow Jones industrial average down 0.6 percent in afternoon trading. The US economy shrank at an unrevised 0.5 percent rate in the third quarter, official data showed. Consumer spending plunged 3.8 percent, the biggest drop since 1980. Economists expect a much bigger decline in economic activity in the current quarter as job losses pile up and households and businesses curtail spending. That in turn is hurting U.S. trading partners around the world. An economist at the San Francisco Federal Reserve Bank said the US recession would likely last 18 months, making it the longest since World War Two, with unemployment peaking at a 25-year high of 8.4 percent. Posted by: tipper 2008-12-24 |
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