If you have been considering a refinance to take advantage of the lowest mortgage interest rates in 50 years there is now another reason to contact us sooner rather than later. Analysts are predicting home values across the US will slide even further in the next year. This means that homeowners with not much equity now may find themselves underwater (owing more than the home is valued) this time next year. Here are some excerpts from a recent article on the topic over at HousingWire:
Standard & Poor’s analysts believe home prices will drop between 7% and 10% through 2011, erasing any improvements prices have recently made.
Home sales, which plummeted after the homebuyer tax credit expired in April have continued to lag. Pending home sales, which preclude existing home sale data, dipped 1.8% in September before the market goes into a winter many expect to be bleaker than usual. With this lack of demand, inventories should grow, according to S&P, while prices drop.
“Low mortgage rates will likely continue to encourage refinancing, but their influence on home buying activities has been limited due to the weak housing market and a lack of demand,” S&P credit analyst Erkan Erturk said.