The housing market recovery appears to have stalled before it even really began. Home sales fell back in October and the renewed downward trend in prices appears to have gathered pace. This is all happening at a time when mortgage rates have remained close to record lows and housing has never looked as undervalued against incomes as it does now. (See Chart below.) The problem is that high unemployment, tight credit conditions and widespread negative equity are preventing households from taking advantage of cheap financing and favourable valuations.
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