正文
Home prices at six year low
On Wednesday September 22, 2010, 3:54 pm
By Lucia Mutikani
WASHINGTON (Reuters) - U.S. demand for home loans fell for a third straight week last week while prices for single-family homes retreated further in July as the housing market struggles for balance with less government support.
The Federal Housing Finance Agency reported today that U.S. housing prices fell 0.5 percent in July to a six year low. Many economists are watching the housing market to analyze leading versus lagging indicators. The consumer has not returned and analysts are examining whether housing data will confirm a strong trend in either direction. June data was revised downward from a decline of 0.3 percent to a decline of 1.2 percent.
Loan applications to buy homes fell 3.3 percent, the Mortgage Bankers Association said on Wednesday. A second report showed the Federal Housing Finance Agency\'s house price index dropped 0.5 percent after falling 1.2 percent in June.
The beleaguered housing market, the main catalyst of the worst recession since the 1930s, has hit a soft patch following the end of a popular homebuyer tax credit in April, posing a threat to the fragile economic recovery.
While much of the housing market weakness has been blamed on the expiration of the tax credit, analysts said stubbornly high unemployment was also sapping demand for homes.
We fear that a more long-lasting slide is under way. High unemployment, heavy indebtedness and widespread negative equity are weighing on housing demand, said Paul Dales, a U.S. economist at Capital Economics in Toronto.
Although the U.S. recession officially ended in June last year, the pace of economic growth has been too sluggish to bring down a 9.6 percent unemployment rate.
The recovery has lost significant momentum, stoking fears in financial markets of a new recession.
STIFFER HEADWINDS
White House Council of Economic Advisers chairman Austan Goolsbee told the Reuters Washington Summit he did not believe a double-dip recession was a likely scenario.
The headwinds have been stiffer than we wanted them to be in the summer and the first three months of the year looked like growth was going to be more robust than it\'s been, said Goolsbee. But I anticipate steady growth, not a double-dip, but not a V-shape.
With jobs scarce, homeowners are losing their houses, causing an oversupply that is weighing on prices.
Near record-low mortgage rates are doing little to stimulate demand with lending standards still tight. The Mortgage Bankers Association\'s index measuring both purchase and refinancing applications last week fell 1.4 percent.
But there is room for guarded optimism. A report on Tuesday showed groundbreaking for new U.S. homes rose 10.5 percent last month, the biggest jump since November, offering some hope the market was stabilizing.
A cautiously optimistic tone was also sounded by David Stevens, head of the U.S. Federal Housing Administration.
I think we are at minimum near bottom and we may be at bottom, Stevens told a congressional panel.
The FHA, which provides federal guarantees on loans, is one of the government\'s main props for the sector.
Data later this week is expected to show sales of previously owned and new homes rebounded in August from July\'s steep declines. Although housing only accounts for a fraction of gross domestic product, it has an out-sized reach.
In the 12 months to July, the FHFA house price index fell 3.3 percent. It is 13.8 percent below its April 2007 peak.
The big downward adjustment in prices is already behind us, but a second downward leg will still undermine the wider economic recovery, said Capital Economics\' Dales.
(Additional reporting by Corbett Daly in Washington and Lynn Adler in New York; Editing by Chizu Nomiyama)
On Wednesday September 22, 2010, 3:54 pm
By Lucia Mutikani
WASHINGTON (Reuters) - U.S. demand for home loans fell for a third straight week last week while prices for single-family homes retreated further in July as the housing market struggles for balance with less government support.
The Federal Housing Finance Agency reported today that U.S. housing prices fell 0.5 percent in July to a six year low. Many economists are watching the housing market to analyze leading versus lagging indicators. The consumer has not returned and analysts are examining whether housing data will confirm a strong trend in either direction. June data was revised downward from a decline of 0.3 percent to a decline of 1.2 percent.
Loan applications to buy homes fell 3.3 percent, the Mortgage Bankers Association said on Wednesday. A second report showed the Federal Housing Finance Agency\'s house price index dropped 0.5 percent after falling 1.2 percent in June.
The beleaguered housing market, the main catalyst of the worst recession since the 1930s, has hit a soft patch following the end of a popular homebuyer tax credit in April, posing a threat to the fragile economic recovery.
While much of the housing market weakness has been blamed on the expiration of the tax credit, analysts said stubbornly high unemployment was also sapping demand for homes.
We fear that a more long-lasting slide is under way. High unemployment, heavy indebtedness and widespread negative equity are weighing on housing demand, said Paul Dales, a U.S. economist at Capital Economics in Toronto.
Although the U.S. recession officially ended in June last year, the pace of economic growth has been too sluggish to bring down a 9.6 percent unemployment rate.
The recovery has lost significant momentum, stoking fears in financial markets of a new recession.
STIFFER HEADWINDS
White House Council of Economic Advisers chairman Austan Goolsbee told the Reuters Washington Summit he did not believe a double-dip recession was a likely scenario.
The headwinds have been stiffer than we wanted them to be in the summer and the first three months of the year looked like growth was going to be more robust than it\'s been, said Goolsbee. But I anticipate steady growth, not a double-dip, but not a V-shape.
With jobs scarce, homeowners are losing their houses, causing an oversupply that is weighing on prices.
Near record-low mortgage rates are doing little to stimulate demand with lending standards still tight. The Mortgage Bankers Association\'s index measuring both purchase and refinancing applications last week fell 1.4 percent.
But there is room for guarded optimism. A report on Tuesday showed groundbreaking for new U.S. homes rose 10.5 percent last month, the biggest jump since November, offering some hope the market was stabilizing.
A cautiously optimistic tone was also sounded by David Stevens, head of the U.S. Federal Housing Administration.
I think we are at minimum near bottom and we may be at bottom, Stevens told a congressional panel.
The FHA, which provides federal guarantees on loans, is one of the government\'s main props for the sector.
Data later this week is expected to show sales of previously owned and new homes rebounded in August from July\'s steep declines. Although housing only accounts for a fraction of gross domestic product, it has an out-sized reach.
In the 12 months to July, the FHFA house price index fell 3.3 percent. It is 13.8 percent below its April 2007 peak.
The big downward adjustment in prices is already behind us, but a second downward leg will still undermine the wider economic recovery, said Capital Economics\' Dales.
(Additional reporting by Corbett Daly in Washington and Lynn Adler in New York; Editing by Chizu Nomiyama)
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