News

    US Housing Market Shows Improvement

    Multimedia

    Major U.S. stock indexes are at their highest levels for the year following the U.S. Federal Reserve's improved economic outlook last week and a national report showing a big bump in home sales. The National Association of Realtors says sales of existing homes surged seven percent in July - the biggest monthly increase in more than ten years.  The good news has helped stoke hopes for an economic recovery. But the picture is not as rosy as it seems.

    Sales of existing homes rose sharply in July, surpassing expectations and fueling optimism that the U.S. economy is on the right track. "Affordability is at an all-time high.  You have home prices that have dropped 25 to 30 percent.  You have interest rates at very low amounts and you have consumers who have been waiting to buy.  Combine that with the eight-thousand dollar tax credit you get if you're a first time buyer, and it's creating a solid demand," said Zip Realty's Patrick Lashinsky.

    But the higher demand is just part of the larger picture. Although the increase was  the largest in ten years, average homeowners have lost about 15 percent of the value of their homes. 

    Economist Mark Zandi says that's symptomatic of a bigger problem in the housing market. "House prices will continue to fall so long as foreclosures continue to mount, so we have to see and hopefully we will see that the president's loan modification plan to forestall the crisis, kicks in," he said.

    But critics of the government's plan, aimed at helping struggling homeowners modify loans to make them more affordable, say fewer than ten percent of eligible loans have been changed. 

    That means many homeowners  will continue paying high interest rates on loans worth more than their homes. 

    Last month, more than 360,000 homeowners were foreclosed, an increase of more than 30 percent since last year. 

    Zandi says part of the problem is that banks are still reluctant to lend. "Well, they're nervous, I mean unemployment is rising, house prices are still falling and as long as that continues, they're going to be reluctant to extend out credit," he said.

    Realtors say the majority of homeowners who plan to stay in their homes need not worry. "If you are not looking to sell your house, don't get caught up in what the data says.  I think you can be confident it will get back to that price point and it will pass it.  Will it be in a year or two?  Probably not.  Within a five to seven-year horizon, I think that you'll be fine," Lashinsky said.

    That's little comfort for an estimated four million homeowners who are struggling to make monthly payments. 

    And with unemployment expected to peak next year, the worry is that foreclosures will continue to rise, making prospects for an economic recovery more elusive.

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora