Slump in the US housing market extended into its fourth year following continuing seize in credit markets. Previously owned homes sale declined with very few Americans signing contracts to buy them.
A National Association of Realtors report from Washington shows a fall in the pending home sales index from 89.5 to 88.9. This expected decline is further spurred by reluctance of banks to disburse loans according to economists. A Wachovia Corp. economist from Charlotte, North Carolina said housing will see tougher times next year as most of the activity now is distress sales.
This year saw a fall of more than a fifth in house prices and it is expected to fall by another fifteen percent, according to an economics professor from Harvard University, Martin Feldstein. A continuous slide in the market is resulting in further foreclosures. This problem will be addressed by Barack Obama after he assumes office on January 20th.
According to another industry report, there will be a drop in investments and employment rates in 2009 as the recession enters its second year. Bleak manufacturer projections and expected decrease of 1.3 percent in payrolls of service companies will result in a drop of equipment sales.
According to a report on home sales, the South and Northeast gains offset weakness in West and Midwest.
President elect Barack Obama pledged to help home owners facing foreclosures in a serious manner. There is also a rising pressure on Henry Paulson, the Treasury Secretary by Democratic Lawmakers to fund the mortgage industry with the $700 billion financial rescue.
