Home Values Expected to Drop This Winter: Are You Prepared?
- Weak homes sales, no underwriting, low employment figures, and an abundance of foreclosures will affect home values.
First Know What's Affecting Home Values Now
As we look at the latest reports for national housing prices, it is clear that home values have once again begun to drop. After peaking in August, prices fell throughout September. This marked the first decline in home prices since April; a trend which many say is likely to continue.
What’s Affecting Home Values Today?
In fact, it’s more than you might think:
- Weak Home Sales: Fewer homes are selling this year than in years past. This fact will continue to hinder both new and existing home values around the country.
- Tight Underwriting Guidelines: Without the ability for a lender to individually assess a borrower, many consumers who are actually ready for home ownership cannot qualify for a mortgage. This is a hard problem as loose standards on underwriting caused the housing crisis originally.
- Low Employment Figures: With unemployment numbers hanging around 9 or 10% this year, don’t expect an influx of consumer purchases anytime soon. A lack of new jobs, both in the public and private sectors, also plays a big role in keeping consumer interest low when it comes to housing.
- The Foreclosure Title Wave: Many states have halted certain foreclosure proceedings to review a messy problem with paperwork (or a lack of it). Once the review is complete these foreclosures will be processed. This will continue to hold housing prices back into 2011.