American economists predict that the road to recovery will be a bumpy as house prices continue to fall.
Mark Zandi of Moody’s Economy.com said the Obama administration’s economic successes will all be for nothing if the housing free-fall continues.
Rising joblessness is said to be having an impact on the demand for housing.
According to The Australian Financial Review, unemployment in the US, which now stands at 9.4 per cent, is expected to peak at more than 10 per cent next year.
The increasing level of unemployment is taking its toll on consumer confidence which is in turn forcing potential home buyers to think twice before buying a property.
Moreover, mortgage credit is still hard to come by. Fannie Mae and Freddie Mac, the nation’s two main federally backed mortgage agencies, have tightened their new-loan standards and a federal survey of loan officers suggest that the banks will remain stringent on credit for some time.