In recent months, mortgage rates have been hovering at or near all-time lows and home prices have continually declined, leading to greater housing affordability. That trend continued into March as a result of foreclosure activity.
New data from the Standard & Poor’s/Case-Shiller home price index shows that the cost of buying a property now stands at a recent low, having fallen 1.9 percent from the same time last year, according to a report from RealtyTrac. And that trend is largely being driven by foreclosures.
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Where these seized properties are concerned, there is a growing supply — homes that have been seized during the housing downturn, but have not been sold yet — and relatively low demand, the report said. As a consequence, prices remain extremely low and the supply-and-demand situation will likely only serve to drive them lower in the future, even as the rate of decline in this metric has slowed since the start of the new year. Currently, prices are still 35 percent below where they were at their height, just prior to the housing bubble bursting.
However, foreclosure activity has largely declined in recent months. In the 20 metropolitan areas the Case-Shiller index covers, the decline has been significant, the report said. In all, only seven of those markets — Charlotte, N.C.; Dallas; Denver; Detroit; Miami; Minneapolis; and Phoenix — have seen home prices increase. The other 13 saw them fall.
But because of the large amount of bank-owned properties, and the large amount of borrowers nationwide who still have underwater mortgages, it is difficult to believe a full-scale recovery of the housing market is going to come any time soon, the report said. However, these new lows could also be the point at which values bottom out and begin improving again, and it’s fair to be at least cautiously optimistic about the state of the market overall.
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In recent months, the amount of mortgage activity from one week to the next has been considered a mixed bag by experts. At some points, the number of homeowners seeking to refinance their existing loans en masse rises, and there are increases in applications for new financing in others, as well as occasional declines or increases in both.
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