US economic recovery 'held back' by struggling real estate

Economic recovery in the US is expected to be hampered by the struggling residential real estate market in the first six months of 2011, analysts have claimed.

According to experts at Bank of America Merrill Lynch, GDP growth in the country will be lower than the estimate of two per cent during the first six months of next year, while a better forecast has been offered for the second half.

In its global economic outlook for 2011, the organisation said that the US economy remains vulnerable to premature fiscal tightening, commodity shock and a variety of other risks.

However, analysts expect growth to inch back up to three per cent in 2012, but a true rebound remains a long way off.

New home sales are down 80 per cent from their peak and existing home sales are off 40 per cent the bank said.

Individuals looking to purchase property in the US may be interested to hear that activity is predicted to remain quiet before starting to climb in the middle of next year.

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