Away from George Osborne and the eurozone crisis, come weaker than expected US housing figures.
The Case-Shiller index showed US house prices fell 3.6% in September compared to a year ago, with prices across the country now around a third lower than their peak in early 2006. Teunis Brosens at ING Bank said that amounted to $7700bn of home equity disappearing, or an average of $103,000 per homeowner:
While we don't expect substantial price declines in the near future, prices could well remain weak for quite some time. The US housing market is still plagued by excess supply, a considerable part of which consists of homes in various stages of foreclosure. These foreclosures will continue to depress prices for some time to come.
The housing market usually leads the economic recovery, with construction and home improvement activity boosting growth. But this time round, the housing market is lagging. Buyers will only return to the market when the jobs market starts to improve materially. With a fragile domestic economy, payroll tax hikes looming in January and spillover risks from Europe, that could take a while.
Despite the uncertainty, and with consumer confidence figures due shortly, Wall Street has moved around 30 points higher in early trading. The FTSE 100, still dragged down by the banking sector, is currently 14.02 points lower at 5298.74.
