Americans should brace themselves for at least another year of plunging house prices, two leading Wall Street economists said yesterday.
The slump, they argue, is, at best, only halfway through its cycle, with the inventory of unsold homes continuing to rise.
Carl Weinberg, at High Frequency Economics, said yesterday: “We are nowhere near the bottom at all.”
Mr Weinberg identified two factors that could keep property prices falling: first, the rising number of unsold homes; and secondly, the fact that the number of sub-prime mortgages, which will reset at a higher interest rate, will not peak until the end of the year. It is expected that many of those borrowers will not be able to absorb the rise in repayments.
Kevin Logan, senior market economist at Dresdner Kleinwort in New York, said that the American housing slump - the worst for 16 years – is halfway through its cycle, or not even that, and that demand for property would continue to recede.
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Tuesday 11 September 2007
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