Better News From the US
There are one or two signs of improvements in the US housing market, and there have been improving consumer confidence scores too. Hopefully the goods news will travel from the US to the UK.
What happens in the US follows in the UK. It’s as true today as it has always been. Take the house prices crisis and the credit crunch of the last 12 months. That was all bad news.
Hopefully, therefore, the UK will follow the US when the good news returns.
Test data in the US has shown that the house price decline has slowed markedly in June. After 18 gloomy months, it could be the first sign that the worst of the housing market crisis could be over.
The Standard & Poor’s/Case-Shiller index showed a decline in the fall of house prices to 0.5% from May to June; it had been 2% per month at the start of 2008.
The annual house price fall stood at 15.9% in June, but despite this high figure, some industry watchers took the slowing fall as a sign of good news. It is thought that some buying interest is being rekindled among American house buyers.
The survey by S&P/C-S was backed up by US Commerce Department statistics showing that sales of single-family homes actually rose in July to 515,000 (seasonally adjusted) from 503,000 in June. In addition the inventory of homes for sale fell by 5.2%.
It is thought that such positive signs are price driven, as tumbling property prices have brought more opportunities for buyers who are trying to spot the bottom of the market.
Another good sign in the US has been the Conference Board index of consumer confidence which was up to 56.9 in August from 51.9 in July. Although this compares with regular ratings of over 90 up until December 2007, any upward movement is a good sign.
With oil prices coming down from their recent peak and the US housing market showing better signs, it has yet to be seen whether similar patterns will start to emerge in the UK.
