Friday, June 17, 2011

U.S. house prices collapse now worse than during Great Depression... and it's about to get even worse - 16th June 2011

The U.S. house collapse is now worse than during the Great Depression and is likely to get worse, according to a new report.

Since the collapse began in 2006, prices have fallen by 33 per cent, more than the 31 per cent drop recorded between the 1920s and 1930s.

Paul Dales, a senior economist at Capital Economics, who authored the report, predicted that house prices will continue to fall by another three per cent over the rest of the year, before hitting rock bottom.

‘Even when that happens, I don't think we're going to see any significant or sustained rises,’ he told Fox News, predicting ‘a couple years of pretty much no recovery whatsoever’.

He said that the fall has been worse than that during the Great Depression because of the boom in prices before the collapse.

In some cities, prices are half of what they were before the housing market collapsed in 2006 and 2007.

Tougher lending standards have made home loans hard to come by.

Many would-be buyers who could qualify for loans are worried prices will fall further. Others are reluctant to put their own homes up for sale when prices are dropping.

Home prices in big metro areas have sunk to their lowest since 2002, the Standard & Poor's/Case-Shiller 20-city index showed last month. Read More