Economic uncertainty makes prospective buyers nervous
As the U.S. economy shows signs of a double-dip, uncertainty on Wall Street is rattling would-be property buyers, Karl Case, co-founder of the S&P/Case-Shiller home-price index, told Bloomberg News.
National homebuyer cancellations rose about 10 percent in the past two months from a year earlier, as buyers had trouble getting appraisals that matched the loan amount, and faced stringent lending standards.
“There’s a dramatic effect on an economy when a major sector is flat out,” Case said. “If housing takes another leg down, it’s an accelerator. It’s going to make a recession happen faster and deeper.”
The Standard & Poor’s 500 Index has fallen for four straight weeks, Bloomberg said, and a lot of people have seen their down payments disappear in the stock market.
“It served as a reinforcement to the hunker-down mentality that a lot of homebuyers already had,” said Keith Gumbinger, vice president of loan data firm HSH Associates. [Bloomberg]