Home Sale Recovery On The Cards?
August 1, 2007
Home sales within the stagnant US housing market could be set to gather momentum, a new industry indicator published today said.
The down and out US housing market has been plagued with scandal over the last few weeks, and its effects on the US economy have been felt around every major stock exchange in the world.
Lax lending practices uncovered within the controversial sub-prime lending market, which some analysts value to the extent of $10billion, have led to increasing defaults on mortgages loaned too far above the borrower’s household income, specifically targeted towards those with poorer credit history.
As a result, mortgage lenders have performed poorly suffering the brunt of bad debts, as have American home buyers with below average economic growth and a growing trade deficit only adding to the US economic problems.
The index of the National Association of Realtors showed a 5% increase through June, well above analysts negative 0.6 forecast.
The rise that has seen the biggest increase in the index in several years has been taken to indicate the start of a potential upturn in the fortunes of the flailing housing market, which has bogged down much of the US economy in recent times.
The news will surely have a positive effect on the stock markets, and indeed within the government, as a sign that the US economy could be on the verge of a turnaround sometime soon.
The Dow Jones jumped after the announcement came today, after a morning of sluggish trading, suggesting investors perceive the figures as positive news for the future of the economy.
Whilst industry experts have been quick to come short of pronouncing a turnaround, many have suggested that the unexpected jump in the index is good news for the future of American housing, and the economy at large.