Nowadays the financial crisis is a fact, not only Europe but also America, actually the whole world is scourged and suffers severely. This crisis has a gigantic impact on several sectors, for instance the banks, the companies,...and even it has an influence on the real estate.
In the US there is a remarkable trend for some time, a slumping sale and the foreclosures are rising. This cause the decrease in prices, so home prices in the US decreased at a record speed last year. More exactly a fall of 18.5 per cent in the Case-Shiller index, it was the biggest fall in December 2008 since the measure 21 years ago. Phoenix, Las Vegas and Minneapolis are the states who are confronted with the sharpest monthly declines. In the meantime consumer confidence sinks to a low level. These declines cause US households additional charges, $370 billion per month which is incredibly high.
The White House reached to a solution, namely a foreclosure prevention plan, because of the importance of the political issue concerning the housing market. The Republicans also desire that the government contribute his mite by subsiding mortgages to help homeowners.
The home price index has also fallen 26.7 per cent, since the peak of the housing market in July 2006. The situation of the prices is alarming for the US consumers, they are much worried because it is still continuing.
My opinion predicts that there will be a house price crash with profound effects on the economy. The house prices and the financial crisis are related, stable prices became a must. The government has to minimize and avoid the effects of fluctuations in prices, otherwise the consumers are again the victim.
Written by Marie Maes
Source: The Financial Times
Article: House price fall is biggest in 21 years – 25 February 2009
By Alan Rappeport
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