Hope For Homeowners? Home Prices Are Up

Homeowners who would like to see some of their long-drained equity return are getting a bit of good news for a change. Prices for both new and existing homes appear to be trending higher, albeit slightly.

The Commerce Department reported today that, while sales of new homes fell in June, prices rose amid a tightening supply of new homes on the market. Housing starts have been down most months this year as builders tried to draw down their inventory.

According to the government data, sales of new homes were down one percent last month but the median price of a new home jumped 5.8 percent to $235,200. Those numbers suggest that fewer modestly-priced new homes sold in June while expensive homes, purchased by wealthier buyers, sold at an even clip.

Existing home prices edge higher

In a separate report, S&P Case Shiller found that home prices in the largest U.S. metro areas rose in May for the second straight month. In the top 20 markets, the median price of an existing home rose one percent from April to May, but was down 4.5 percent from May 2010.

It's good news for more than just the restoration of equity. Many housing experts believe mortgage lenders will begin to loosen their very tight loan standards once they are convinced home values have declined.

Lawrence Yun, chief economist for the National Association of Realtors, said he believes home sales would rise dramatically if lenders would simply return to their pre-housing bubble lending standards.

Aid deadline extended

There was even a bit of good news today for homeowners teetering on the brink of foreclosure. The Department of Housing and Urban Development (HUD) announced the deadline for the Emergency Homeowners' Loan Program has been extended to Wednesday, July 27, 2011, in order to give homeowners at risk of foreclosure in the participating 27 states and Puerto Rico more time to apply for the program.

That program is designed to assist homeowners who have experienced a reduction in income and are at risk of foreclosure due to involuntary unemployment or underemployment, due to economic conditions or a medical condition. Eligible homeowners can qualify for an interest free loan, which pays a portion of their monthly mortgage for up to two years, or up to $50,000, whichever comes first.

More information on the EHLP assistance and its eligibility requirements is available online. Homeowners may also call the toll free hotline -- 855-FIND-EHLP (346-3345) - for this information as well.