Hopes for a recovery in the US housing market were damped by new figures showing that the number of households caught up in the foreclosure crisis rose more than 5 per cent in the last quarter.

Nearly 938,000 properties were affected by the crisis in the months between July and September, compared with about 890,000 in the prior three months, as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.

Although house price figures suggest that the three-year housing slump has bottomed - with the latest S&P/Case-Shiller index of house prices in 20 metropolitan areas rising nearly 4% in July - the new data suggests that one in every 136 US homes received a foreclosure filing during the quarter

The Times