Daily Dupaco

Friday, November 19, 2010

Home prices not done falling

MADISON, Wis. (11/17/10)--Look for home prices to slide perhaps another 7% between now and midyear 2011, according to FiServ, a market analytics company based in Brookfield, Wis.
If that forecast is right, home prices nationally will have dropped 34% from their peak by the time they hit bottom.

For as many as three million Americans, the dream of owning a home has faded. Home ownership has declined from its peak of 69.1% in 2005 to 66.9% today (CNNMoney.com Nov. 2). Additionally, the vacancy rate among homes designated owner-occupied is 2.5%.

Despite low mortgage rates, which averaged 4.3% in September for a 30-year fixed rate and 3.8% for a 15-year rate, "people aren't going to be in the market if they can't find jobs--or feel insecure about keeping their jobs," says Susan Tiffany, CUNA's director of consumer periodicals.

If you're in position to leverage today's low rates, Tiffany has these suggestions:
  • Shorten the term of your mortgage. You'll probably need a strong credit score and at least 20% equity.
  • Look to free up some cash. Refinancing can reduce your monthly payments or help you save money with a lower interest rate and/or shorter term for repayment.
  • Expand your real-estate holdings. If you are looking for a second home, or an investment property, it looks like a buyer's market over the next year.
Tiffany offers one caveat: "Most forecasters are saying mortgage rates may rise gradually through 2011."

To read the entire Home & Family Finance article, click here.
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