A recent article posted on CNN reveals that home prices are now at a 10-year low across the nation.  While the reasons for the drop in home sales is varied, many economists forecast that home prices will continue to decline in the coming months.  One reason for the decline is that the government is no longer offering financial incentives to homebuyers looking to get into a home.  Further, it is reported that a wave of foreclosures resulting that was slowed due to negotiations over foreclosure abuses will soon arrive.  This wave will cause temporary declines in values but in the long term will help stabilize the market and result in long term recovery, reportedly. However, the real estate market suffers from more than just backlogged foreclosures…(continue below).

While I am not surprised by the continued drop in home prices, I am hesistant about any wave of foreclosures.  The more likely explanation for slowing foreclosures is the fact that large banks have suffered significant damage and are struggling to turn profits for shareholders.  Unfortunately for them, more foreclosures are unlikely to help their balance sheets.

While home prices are at a 10-year low, mortgage rates are also near an all-time low.  This has the opposite effect on home sales and has helped drive home sales despite a poor economy, little job growth, and extremely tight lending standards.  So, while the government may no longer be handing out checks to first-time homebuyers, they have kept interest rates low to offset a poor real estate market.

If you are significantly underwater on your mortgage or are looking for options to save money on your home, a loan modification or loan remod may be an option for you.  De Novo Law Firm has helped hundreds of clients save their homes, eliminate debt, and get a fresh start.  Contact us today at (877) 346-7411.


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