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17 December 2007

Over 20% of US homeowners experience house price falls

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by Kay Mitchell

Over 20% of US homeowners experience house price falls

A Reuters-University of Michigan consumer survey said that 21% of US homeowners expect their home to fall in value in the next 12 months.

The survey’s director, Richard Curtin, said even homeowners that expect gains in prices over the next 5 years are losing confidence. Mr Curtin added that the survey results indicate a broader and more lasting slump in property prices and, as a result, the information also leans toward broader and deeper cuts in spending.

Mr Curtin continued that it is a distinct possibility economic reports indicate a fall in consumer spending in some quarter in the future.

The US housing slump is now in its third year and the survey is further proof that the slump will continue longer than anticipated.

Wall Street economists have been downgrading forecasts on US housing over the last few months, anticipating that attempts by lawmakers and regulators to stem an increase of repossessions will have only a slight impact.

Howard Pinto, property specialist at City Homes London, recently said that the sub-prime mortgage crisis in the US is a frightening situation for the global economy. He said the fact that the US is facing losses and falling is an indication of what is about to occur here in the UK.


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