U.S. Home Prices Tumble
Artcle review
It is reported that sales of existing homes in the US fell by 2% in March from the month before. Compared to a year ago, US’s house prices has dropped about 7.7% Joseph A. LaVorgna, chief economist at Standard & Poor's said in a note to investors Tuesday that falling home prices aren't such a bad thing, "On one hand they are causing negative wealth effects and forcing some new mortgages underwater; but on the other hand, this is a necessary, albeit unpleasant, prescription for restimulating housing demand," he said. This is true as falling prices will lead to a higher demand demanded for the houses in the USA in the future. On the other hand I feel that the falling prices will not stop due to the current world trend of rising gas and food prices. This has clearly affected consumer's confidence which drive the market. Also i would like to point out that USA is currently undergoing depreciation of the US dollar consumers will as a result postpone their plans to purchase houses until they feel economically secure and confident.
TAN ZI JIE
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