US Pending Home Sales At All-Time Low
October 3, 2007
The number of new homes awaiting sale in the US has fallen to an all time low over the month of August as a result of the impact of the credit crunch on riskier loan options, according to official figures released today.
In the figures released by the National Association of Realtors, the number of pending home sales in the US had hit an all-time rock bottom over the last month, down 6.5% on previous results as a direct impact of the sub-prime fallout.
Its leading index of pending home sales was down to 85.5, reflecting the ongoing downturn in the US housing market and the widening extent of the sub-prime effect on the broader US economy and the situation for home buyers on the whole.
The figures come out as the lowest since the survey was initiated back in 2001, and has shown a fall of over 20% over the course of the year through August as a sign of how far the sub-prime and credit crunch problems have affected the economy.
With rising defaults in the sub-prime sector tying up immediate term bank liquidity, lenders have been significantly more cautious in their approach to mortgage lending, particularly amongst those traditionally seen as high risk.
As a result the health of the US economy, and that of the global economy as a whole, has been affected to a material extent, which has seen downturns in stock market trading, consumer and investor confidence and now in the US poor home sales.
Additionally, the stagnant market conditions of recent years which have seen the housing balance shift to a mainly buyer-led environment have compounded off the back of the sub-prime fallout, which analysts are taking as a sign of worse conditions to come.
The Federal Reserve are expected to meet this week to discuss interest rate policy, which could see a further rates cut in light of today’s news.
Comments
Got something to say?
Advertisement
