Hopes of a recovery were also damped down as the US registered its first year-on-year fall in inflation for more than half a century in March, due to falls in energy prices. Recovery of the housing market is central to the recovery of the US economy, and the latest data puts paid to comments this week by President Obama that he saw "glimmers of hope" in the economy. His views were largely based on earlier housing surveys. The number of US citizens losing their homes leapt by 44pc last month, as banks pursued delinquent borrowers after federal mortgage lenders Fannie Mae and Freddie Mac lifted temporary bans on foreclosures. A survey by Foreclosures.com found that 175,199 homes were repossessed by lenders in March. In spite of major banks promising to work with troubled mortgage holders to keep them in their homes, almost 370,000 families have lost their homes so far this year. Mortgage applications also fell last week for the first time in more than a month, suggesting that even with borrowing costs at record lows, potential house buyers are staying out of the market. The bearish outlook was compounded by the Federal Reserve's Beige Book, which provides an assessment of regional economic activity. It said the US economy continued to weaken in March – albeit at a slower rate – and found that the housing market remains "depressed overall". President Obama's comments, which were backed by Fed chairman Ben Bernanke's talk of "tentative signs" of recovery, are at odds with those from Mike Duke, chief executive of Wal-Mart, America's largest retailer. In a TV interview Mr Duke said the economy would not "just bounce out and come back" from recession, adding "there is still a lot of stress" among consumers. "It's not a V-shaped recession. This is one that is going to take a sustained change in the way families live." Further key housing data is expected later today when the US government releases the number of new houses being built. The figure jumped by 22pc in February, but Barclays Capital's Dean Maki is forecasting a 6pc fall for March. Economists played down the chances of the US entering deflation, in spite of the consumer price index falling 0.1pc fall in March, meaning consumer prices are now 0.4pc cheaper than a year ago, the first fall in the annual rate since August 1955. White House economic adviser Larry Summers warned that "concern about deflation in the nearer term can be entirely discounted." But many economists took solace in the fact that the core rate of inflation – stripping out food and fuel – rose by 0.2pc last month.US housing data puts Obama's hopes on hold
The fledgling recovery in the US housing market appears to have stalled, reducing the chance of President Barack Obama's "glimmers of hope" turning into green shoots any time soon.
Thursday, 16 April 2009
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