NEWS    RECALLS    COMPLAINT FORM    SCAM ALERTS   RESOURCES  
Small Claims Guide   Class Actions   Lemon Laws   FAQ   Newsletters  
Share


Complain about a product or service

Automotive    Education    Employment    Electronics    Family    Finance    Health    Homeowners    Insurance    Pets    Shopping    Travel     Print This     Email This    



NEWS   Latest |  Archives |  Auto |  Cells, etc. |  Computers |  Financial |  Health |  Homeowners |  Parents |  Privacy |  Scams |  Seniors |  Travel

Home Prices Fall Again, Sabotaging Recovery Hopes





By Martin H. Bosworth
ConsumerAffairs.com

May 29, 2007

Mortgage Crisis? Act Now to Avoid Foreclosure
Avoiding Foreclosure Takes More Than Hope
---
Distressed Homeowners May Be Able To Rent Their Homes
Should You Walk Away From Your Underwater Mortgage?
Home Prices Rise Four Months In A Row
Consumer Credit Plunges In August
Study: Action By Feds Made Housing Crisis Worse
Mortgage Lender's Collapse Leaves Borrowers Adrift
Bank of America, Wells Fargo Hit With Class Action
Bank Sees Dim Future For Homeowners
Ohio Sues Mortgage Servicer Over Lack Of Modifications
---
More ...

Home prices across the United States posted their first year-to-year decline since 1991, with a 1.4 percent decrease between the first quarter of 2006 and the first quarter of 2007. The news was further evidence that the prolonged slump of the real estate market would not be ending any time soon.

Standard & Poor's Case-Shiller index for home prices found that sales of existing homes in 13 metropolitan markets either showed price cuts or slow appreciation. Formerly hot housing markets such as Boston, Washington, D.C., and San Diego showed sharp price declines.

Other areas, such as Portland, Ore., and Seattle, showed price gains, but at more modest rates than previous estimates from 2006.

Analysts attributed the price drops to several factors, including excess inventory of unsold homes, and the rising tide of foreclosures and defaults among homeowners trapped in costly "creative" mortgages.

Lower home prices, coupled with high gas prices and higher costs of goods, may scare consumers away from cashing out their home equity for financing other loans or spending projects.

Home prices and sales have been on a rollercoaster in recent weeks throughout the country, with sales of new homes posting a strong 16.2 percent gain in April 2007. But the gain was attributed primarily to struggling home builders slashing prices in order to reduce their stores of unsold homes, even as sales of existing homes continued to sag.

Nouriel Roubini, chairman of Roubini Global Economics, said that the home sales spike in April was not any sign of good news for two reasons.

"[F]irst, the excess supply of new homes is still so large that only much lower home prices will dent this overhang," he wrote. "[S]econd, lower home prices means lower home equity and lower home wealth for homeowners."

The frenzy of homebuilding during the boom years of the housing market has left so much unsold inventory that David Seiders, chief economist for the National Association of Home Builders (NAHB), recently said it might take until 2011 to match peak levels.

"We're still being hit pretty hard by the subprime-related mortgage market problem," Seiders said.

At the height of the recent housing boom, a combination of lax lending standards and low interest rates led many financiers to offer home loans to their subprime customers, traditionally deemed too risky for "prime" lending terms. Many eager homebuyers signed on the dotted line without realizing that their low rates would double or triple in a few years' time.

As home values continue to drop and mortgage payments continue to rise, many lenders are quietly working with overextended borrowers to modify their loans and prevent even more defaults, while many of the formerly successful subprime lenders such as New Century are being sold on the auction block or drastically cutting back on their business.



Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Share

Follow us on Twitter.

FREE CONSUMER NEWSLETTERS

The Daily Consumer
Afternoons M-F

Sign up now!


Consumer News & Alerts
Every Sunday

Sign up now!





CONSUMER NEWS

SAFETY RECALLS

Back to the top |

Advertisement


Custom Search
AUTOMOTIVE
• Dealers
• Manufacturers
• Service
• Extended Warranties
• Lemon Laws
• Recalls
• Tires
• Transporters

FAMILY
• Aging
• Children, Parenting
• Recalls
• Dating
• Education
• Entertainment
• Pets
• Weddings
FINANCE
• Annuities
• Banks
• Credit Cards
• Debt Collection
• Debt Counseling
• Insurance
• Investing
• Loans
• Mortgages
• Payday Loans
• Student Loans
• Tax Prep

HEALTH
• Doctors
• Drugs, Pharmacies
• Health Clubs
• Hearing Care
• Hospitals
• Nursing Homes
• Nutrition, Diets
• Vision Care
• Weight Loss
HOUSE & HOME
• Appliances
• Cookware
• Furniture
• Home Improvements
• Lawn & Garden
• Movers
• Pools & Spas
• Realtors, Rental Agents
• Recalls
• Utilities

ELECTRONICS
• Cable TV/DBS
• Cameras
• Cell Phones
• Computers
• Home Electronics
• Internet Access
• Local Phone Service
• Long Distance
• VoIP
SHOPPING
• In-Home
• Online
• Retail Stores
• Sporting Goods
• Supermarkets
• Telemarketers

TRAVEL
• Airlines
• Bus Lines
• Car Rental
• Cruises
• Hotels
• Travel Agents
• Trains

RESOURCES
• Class Actions
• Complaint Form
• Small Claims Guide
• Lemon Laws
CONSUMER NEWS
• Latest News
• Automotive
• Telecom
• Financial
• Health
• Homeowners
• Scams
• Seniors
• Travel
• More ...

RECALLS
• Automotive
• Children's Products
• Drugs
• Food
• Household Products
• Sporting Goods

ABOUT US
• FAQ
• Privacy Policy
• Advertise With Us
• Newsroom
• Syndication
• Terms of Use

Terms of Use Your use of this site constitutes acceptance of the Terms of Use

Advertisements on this site are placed and controlled by outside advertising networks. ConsumerAffairs.com does not evaluate or endorse the products and services advertised. See the FAQ for more information.

Company Response Welcome If complaints about your company appear on our site, we welcome your response. Please see the Response Form for more information.

For more information, see the FAQ and privacy policy. The information on this Web site is general in nature and is not intended as a substitute for competent legal advice.  ConsumerAffairs.com Inc. makes no representation as to the accuracy of the information herein provided and assumes no liability for any damages or loss arising from the use thereof. 

Copyright © 2003-2009 ConsumerAffairs.com Inc.  All Rights Reserved.    The contents of this site may not be republished, reprinted, rewritten or recirculated without written permission.