Home prices see steepest drop in 20 years
Tuesday U.S. home prices fell 3.2%, which is the steepest rate of decline since 1987. Unfortunately, there is no evidence of a market recovery or even slowing down anytime soon either. This is actually the 5th straight month in which the sales of existing homes has dropped, thus showing a substantial increase in the number of unsold homes.
All of this has taken place after 5 years of rapidly rising home prices. Last year the market stalled out with prices either holding steady or falling as sales slowed. Ever since then lenders have made it much more difficult for some people to get mortgages by tightening standards. This is not only affecting those people who have a history of poor credit repayment but it is also affecting those more credit worthy borrowers as well.
Numerous steps have been taken to stabilize this situation and it is expected that that there will be a further cut in the federal funds rate, which has held steady at 5.25% for over a year. It is only a matter of time before something is going to have to be done to give the real estate market the jump start that it really does need.
September 23rd, 2007 at 1:56 am
I guess it should be some comfort that “Federal Housing Administration (FHA) will help an estimated 240,000 families avoid foreclosure by enhancing its refinancing program effective immediately. ” according to the information on their website. Let’s hope that will help.