High unemployment levels and rising personal debt are helping to contribute to a slowdown in growth of the US property market. Capital Economics has claimed that these factors are helping to dissuade individuals from making purchases in the sector despite record-low mortgage rates.
"Record low mortgage rates and the previous sharp declines in house prices mean that, by historical standards, housing has remained incredibly affordable and very undervalued," the research firm said.
However, high unemployment, heavy indebtedness and widespread negative equity are making many households "unable or unwilling to borrow". Indeed, the unemployment rate in the US has remained constant for a third month in a row at 9.6 per cent.
The news comes despite news that the country reported a GDP growth rate of two per cent for the third quarter of the year, up from 1.7 per cent in the previous quarter, according to International Business Times.
Capital Economics added: "The economic backdrop has improved over the last month, but the economy is still a long way from being able to support the housing market significantly."