U.K. housing prices have begun to drop again, making for a tiny double dip:
The housing market seems set to undergo its own “double-dip” recession, with Halifax announcing yesterday that there was a 1.5 per cent fall in house prices between January and February, and with the slow economic recovery now on course to depress sentiment for the rest of the year.
Prices remain 8% above their April 2009 bottom, but mortgage lending is collapsing:
BBC: Mortgage lending also suffered at the start of the year. Recent figures from the Council of Mortgage Lenders also showed that gross lending for home loans fell by 32% in January compared with December, reaching a 10-year low of £9.1bn.
Bad weather and the expiration of tax subsidies are being blamed, whereby on January 1st the nation’s ‘stamp duty’ threshold dropped back down to just 125,000 pounds from 175,000. The stamp duty relief had been in effect for about a year before being rolled back.
Message to the U.S. administration: Supporting the U.S. housing market with tax relief, say via another extension of the homebuyer credit, is in your best interest.