US Housing Market Bottoming. Prices Won't Be Rising Anytime Soon

An index of US house-builders confidence in the market has jumped to 14, its highest level for many months. Anything south of 50% still shows negative confidence in the market, but the fact that it rose 6 points from 8 last month to 14 this month has been responded to by almost unbounded optimism -- fanfares almost.

At the same time, estate agents are reporting massive increases in sales throughout the states that were worst affected by the crisis, including the metropolitan area of Las Vegas where agents say sales were 80% higher in Feb this year, than the same month a year earlier.

They put this down to first time buyers coming to the market in massive numbers, where they are often forced into bidding wars with foreign investors and speculators.

Indeed, some property industry favouring economists are headlining on the bottom of the market being reached. The US housing crisis started long before the UK crisis began, and prices probably have been falling rapidly enough and for long enough for them to have reached a point that could be called the bottom. However, with foreclosures continuing to rise (up 24% this quarter compared to last year) the atrocious state of the wider US economy, including the banking sector, and the constriction of mortgage lending, prices will unlikely to be rising again any time soon.