Housing prices: How low can they go?
Housing prices. How low can they go? They have fallen severely since the housing bubble collapse of 2007-2008. According to David Seeger, President and CEO of Great Lakes Credit Union, the cause of the housing bubble was risky, loose credit underwriting standards resulting in â??too easyâ?? financing for home loans. So, with more people receiving home loans that traditionally would not have been able to buy a home before, it put pressure on home prices and made the cost of homes go up at an accelerated rate. The hardest hit areas once the bottom started to fall out were the southwest United States and the Carolinas.
So, where does Toledo stand? In the Toledo market, according to the Toledo Blade, home sales have increased 17.6% in June of this year. Seeger says that the latest Housing Price Index (HPI) shows that the drop for the 1st quarter of this year was -0.76%, which is not as significant a drop and may show signs of leveling off. This is great news if it continues. Another slowdown or double dip recession could interrupt this leveling off, which the Chairman of the Federal Reserve cited as a major concern last week.
Seeger suggests that, if you were one of the ones who got in over their heads with a mortgage, look into the HARP Program. It allows people with mortgages that are underwater to refinance their mortgage to take advantage of the lower rates, even though they owe more than the house is worth. CoreLogic recently reported that 11.4 million people in the U.S. owe more on their mortgage than what their home is currently worth.
For more information, contact David Seeger at Great Lakes Credit Union at www.glcu.com.