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| US house prices 'see record fall' | US house prices 'see record fall' |
| (20 minutes later) | |
| US house prices were down a record 15.4% in the April to June quarter compared with a year ago, according to a closely-watched report. | |
| The decline was recorded by the latest S&P/Case-Shiller survey of US national home prices. | The decline was recorded by the latest S&P/Case-Shiller survey of US national home prices. |
| The report said the fact that the falls were nationwide was the latest sign the US housing downturn is continuing. | |
| The figures come a day after a separate study said the volume of home sales in July were down 13.2 on the year. | The figures come a day after a separate study said the volume of home sales in July were down 13.2 on the year. |
| 'Mortal enemy' | 'Mortal enemy' |
| Housing analyst Gary Shilling said a key problem for the housing market was the oversupply of unsold new homes built during the recent boom years, which he estimated still stood at 1.8 million properties. | Housing analyst Gary Shilling said a key problem for the housing market was the oversupply of unsold new homes built during the recent boom years, which he estimated still stood at 1.8 million properties. |
| It is reasonably encouraging in that it suggests that some parts of the problem are more localised now Economist David Sloan of 4Cast | |
| "The key point is we are a long way from bottoming out," he said. | "The key point is we are a long way from bottoming out," he said. |
| "The bulls keep hoping otherwise, but the basic problem is excess inventories. They are the mortal enemy of prices." | "The bulls keep hoping otherwise, but the basic problem is excess inventories. They are the mortal enemy of prices." |
| However, other analysts were less downbeat, pointing to the fact that the month-on-month rate of house price declines appeared to be slowing. | |
| The fall in May was 0.85%, compared with 1.28% in April and 2.15% in March. | |
| "Prices are still falling but at a progressively lesser pace, this is the slowest decline since last July," said economist David Sloan of 4Cast. | |
| "It seems that some areas are now finding a base. It is reasonably encouraging in that it suggests that some parts of the problem are more localised now." | |
| The S&P/Case-Shiller survey bases its findings on 20 of the largest US cities. | The S&P/Case-Shiller survey bases its findings on 20 of the largest US cities. |
| Those that saw the biggest drop in prices from the second quarter of 2007 to that of this year were the sunbelt cities of Las Vegas (-28.6%), Miami (-28.3%), and Phoenix (-27.9%). Falls were also particularly sharp in Southern California, which had previously seen a huge boom. | Those that saw the biggest drop in prices from the second quarter of 2007 to that of this year were the sunbelt cities of Las Vegas (-28.6%), Miami (-28.3%), and Phoenix (-27.9%). Falls were also particularly sharp in Southern California, which had previously seen a huge boom. |
| The least affected city was Charlotte, North Carolina, where prices fell only 1%. | |
| The continuing falls in the housing market are likely to prove a further headache for the banking sector, which has suffered huge losses as the value of its bonds linked to house prices has fallen. | The continuing falls in the housing market are likely to prove a further headache for the banking sector, which has suffered huge losses as the value of its bonds linked to house prices has fallen. |