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<a class="moz-txt-link-freetext" href="http://www.guardian.co.uk/business/2008/aug/14/subprimecrisis.housingmarket?gusrc=rss&feed=worldnews">http://www.guardian.co.uk/business/2008/aug/14/subprimecrisis.housingmarket?gusrc=rss&feed=worldnews</a><br>
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<h1 id="heading-alone" class="article-no-standfirst">Sub-prime crisis:
Property crash pushes third of US homebuyers into negative equity</h1>
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<ul class="article-attributes no-pic">
<li class="byline"> <a
href="http://www.guardian.co.uk/profile/andrewclark"
name="&lid={contentTypeByline}{Andrew Clark}&lpos={contentTypeByline}{1}">Andrew
Clark</a> in New York </li>
<li class="publication"> <a
href="http://www.guardian.co.uk/theguardian"
name="&lid={contentTypeByline}{The Guardian}&lpos={contentTypeByline}{2}">The
Guardian</a>, </li>
<li class="date">Thursday August 14 2008</li>
<li class="history"><a style="cursor: pointer;"
id="historylink-byline" class="sendbyline">Article history</a></li>
</ul>
<p>The US property market has
collapsed with such ferocity that almost a third of homebuyers are
trapped in negative equity with mortgages outstripping the value of
their homes.</p>
<p>House prices in the US are plunging at their fastest
rate for 12 years, leaving millions of people struggling to meet home
loans often provided by unscrupulous lenders after making minimal
checks on the suitability of borrowers.</p>
<p>Among Americans who
bought homes since the beginning of 2003, some 29.1% are in negative
equity according to research by Zillow.com, an online specialist in
house values. For those who bought in 2006, as many as 45% have
mortgages under water in comparison to the sale value of their property.</p>
<p>"For
homeowners who need to sell, this is a gravely serious situation," Stan
Humphries, Zillow's vice-president of analytics, told Bloomberg News. </p>
<p>"It
can also be harmful to communities where the number of unsold homes
adds more houses to inventory and puts downward pressure on prices."</p>
<p>The latest figures on house prices showed a year on year drop of
9.9%. </p>
<p>Worst
hit are previously booming areas such as Los Angeles, where prices are
down 27%, and Las Vegas, which has seen a drop of 21%.</p>
<p>Citigroup's
housebuilding analyst, Josh Levin, yesterday predicted that property
prices could continue falling through 2010 and possibly 2011.</p>
<p>One
of America's largest mortgage finance companies recently forecast that
prices would drop by between 18% and 20% from "peak to trough" in the
current downturn. </p>
<p>Freddie Mac said the US property market was in its most dismal
condition since the great depression of the 1930s.</p>
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