by Calculated Risk on 4/09/2008 01:07:00 PM

From The Economist: The bust begins

... finally, tighter credit and overstretched household budgets are pulling prices down.

A collective shudder ran down the spines of British homeowners on Tuesday April 8th when Halifax, a part of HBOS and the country’s biggest mortgage lender, revealed that house prices fell in March by 2.5%.

And just like in the U.S., transaction volume is declining, and inventory is increasing:

... both the Halifax and Nationwide are predicting “modest” declines in house prices this year. Forward-looking indicators suggest a gloomier picture. The number of mortgages approved for house purchase was almost 40% lower in February than a year before. According to the Royal Institution of Chartered Surveyors, estate agents have been grappling with the worst conditions—measured by the ratio of completed sales to unsold stock—since September 1996.

The housing bust is going global.