Default Activity
In the East Bay, about 171,000 households or 31% of all mortgaged homes were underwater in the 3rd quarter of 2010 – a decline of 1.4% as compared to the previous quarter. Much of this decline was due to increased foreclosure action on the part of the banks as opposed to increasing home prices. The Federal Reserve Bank has estimated that one third of those who are underwater will return to positive equity within years by paying down debt. That still leaves a large chunk of homeowners who could suffer foreclosure action in the months to come.
Overall Economy
The end of 2010 saw a number of encouraging signs for the economy with respect to layoffs, factory production and consumer spending. The latter should continue to improve with the Congress approved tax cuts putting a little more money in the hands of consumers. Economists are predicting a 4% growth in the US economy which should help lower the unemployment rate. Homeowners who fall behind on their mortgage payments and subsequently get foreclosed upon are often unemployed. The market has seen an increase in mortgage interest rates and the expectation is that these will continue to rise at a moderate pace in the year ahead.
Most predictions suggest that the housing market will begin stabilize in the second half of 2011.
For more information visit http://www.rubyhillliving.com/
No comments:
Post a Comment