It’s a dichotomy. The government keeps telling us that the economy is improving, but how can that be when foreclosures and mortgage delinquencies are both on the rise? BankingMyWay takes a look under the hood to see why homeowners remain in financial peril, and what can be done about it.
At first glance, the steep descent in U.S. home values seems to have slowed, if not stabilized, as 2009 (thankfully) draws to a close.
But is it a temporary lull in what could turn out to be a double-whammy for U.S. homeowners? The evidence suggests it might be.
Before we get to that, the conventional wisdom coming from the real estate sales industry, and from the U.S. government, suggests that the worst is over.
Recently, Lawrence Yun, the chief economist for the National Association of Realtors, estimated that U.S. home prices will rise by 3.6% in 2010, while existing home sales will spike upward by 13.6%. Yun says that the main pump-primer will be the extension of the new homebuyer $8,000 tax credit (along with a new tax credit for current homeowners who buy a new home). He estimates that the extension will add 2.2 million new home sales in 2010.Overall, Yun estimates that the average U.S. home value will rise to $178,000 from $172,000 next year.
But, to be charitable, the NAR’s housing forecasts haven’t proven reliable in the past. Both the NAR and Yun said that U.S. housing prices would rebound in 2007 and you don’t have to be Nostramadus to figure out that didn’t happen. And in July 2008, Yun told the Associated Press that “I think we are very near to the end of the housing downturn.” But, in 2008 and so far in 2009, that really hasn’t happened, either.