Home sales in the USA plunged to the lowest level in 15 years.
The plunge amounted to a 27.2% slide in the number of sales compared to the previous month of June – the biggest drop in sales since 1968 and dragged down the markets and cast new doubt on an economic recovery in the USA.
The prevailing low interest rates were obviously not enough to encourage people to buy and overcome their fears of increasing foreclosures and rising unemployment.
According to an article by Robert Gottliebsen in Smart Company:
Americans are trapped as huge housing losses mount with a significant proportion of the population meeting their mortgage payments despite having negative equity in their homes.
And with a large ‘shadow’ inventory of unsold properties, there is fear of more price falls and banks are reluctant to lend on houses. It clogs the whole economy and creates a vicious circle.
He explains why US property values may fall another 10% and how the local banks are reluctant to lend to home owners – let alone investors.
I’m concerned about the property spruikers recommending Australians consider buying USA properties – there is more trouble to come there and no end in site. Stay clear of overseas property – there are much better property investment opportunities back home.
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