Ask A New Jersey Closing Expert

The housing market prices are still falling and the decline is far from over.  The housing prices plunged while the foreclosure rates are still rising.

Home prices plunged by a record 8.4 percent in November, according to a composite index based on 10 U.S. cities tracked by Standard & Poor’s. It was the eleventh straight monthly decline for the so-called Case-Shiller index.

“Nothing in these numbers suggest a bottoming out. The numbers universally are disappointing,” said David Blitzer, S&P’s managing director and chairman of the index committee.

A separate report showed that mortgage foreclosures surged in 2007 as many homeowners found themselves unable to keep up with sharp increases in mortgage payments and unable to refinance because their homes had lost too much value. Some 1.3 million homes were the subject of a foreclosure filing, up about 80 percent from 2006, according to RealtyTrac.

Despite falling interest rates and some $100 billion in cash pumped into the global banking system by the Fed, credit remains tight as lenders worry about the risk of further losses from bad mortgage debts. Unless the tide can be turned to stop a coming wave of mortgage foreclosures, rising loan defaults this year will dump more empty houses on a market already glutted with too many. So far, tumbling mortgage rates have done little to revive the housing market. Coupled with larger and larger number of mortgages resetting this will continue to lead to a larger drop in housing prices.

 With more than 1.8 million mortgages scheduled to reset to higher rates this year and next, the outlook for the housing market remains bleak as more foreclosed homes are put up for sale. A late-year surge in foreclosure filings suggests that many are in the initial stages of the foreclosure process, RealtyTrac said

(http://www.msnbc.msn.com/id/22897832/)

This continued mixture of larger inventory and larger number of properties falling into the foreclosure process; this will lead to a continued decline in the housing market.  There is a slight position of hope as the Fed rate drop coupled with the upcoming Spring/Summer buying market could help level off the decline in housing prices.

Your friend,

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This entry was posted on Thursday, January 31st, 2008 at 1:35 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.