So everyone has been very excited that with the new tax breaks people are buying houses at much higher levels than they did before....
well lets not get too excited ....
while the economy grew at 2.8% (short of the 3.5% predicted last month) ...
Home prices grew 0.3% ... not much but its better than the losses people had been seeing... but don't get too excited - experts are predicting that with the rising amount of unemployment the nation will again see mass foreclosures, which could reverse any growth we have seen this last quarter.
AND 10.7 million mortagages currently out ther are for more than the house is actually worth ... that is - even if the homeowners tried to down-size their house to one more affordable, they could never get enough for it on the market to pay off the full mortgage that they have on it (that is not considering any improvments that they may have added since moving in - usually that is the bathroom or kitchen first)
One analysis company(First American Corelogic) says that 5.3 million (or about half) of those mortgages are at least 20% higher than the homes are worth and that the owners will never be able to sell them on the market place at the price they would have to ask in order to pay off what remains on their mortgages completely -- not to mention what they would need to have to pay for part of a new home.
This means that we are just this side of a landslide of foreclosures, unless the job market gets better --- but as we all know, when the bigwigs of a company feels it in their pocket book so does everyone else.
So - what wonderful news that is coming just in time for the holdiays - huh?
I remember when we got the second mortgage (home equity loan) on the old place we were able to get up to 125% of the houses equity ... determined by what the state said we could get for it minus what we owed on it.
I can see where people may have gotten themselves over their head trying to keep the home until the prices go back up ... I could see us doing that too.
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