Housing Prices Still Reeling Years After Crisis

Published on June 8th, 2011
Written by Public Record Finder Staff

Over the last five years, few public records have garnered as much media attention as housing prices. Prices were obviously hit the hardest during the precipitous fall in autumn 2008, but prices had seemed to stabilize for a time. In recent months, however, the housing market appears to be moving towards the dreaded double-dip. Many investors have been warning of a double-dip recession since the time of the first economic downturn, and current housing numbers are beginning to suggest that this may be the reality. In the latest Case-Shiller Home Price Index from Standard & Poor's, home prices fell by nearly one percent in the nation's 20 largest cities during March. Home prices are now down approximately one-third from their peaks in July 2006, and there seems to be no end in sight.

Several factors have contributed to the rampant decrease in home prices, with the most obvious being foreclosures. Many of the people being forced from their homes simply cannot make their payments any more. It's no surprise that with the national unemployment rate still flirting with ten percent, some people are taking part in strategic defaults on their mortgages. In these cases, people are still capable of making their home payments but choose to default instead because they are underwater (i.e. owe more on the house than it is worth). With home prices have falling for such a long period of time, and many people holding multiple home equity lines of credit, the rate of people underwater in their homes remains high. Excess housing supply is another factor that is keeping prices low, a fact that is only exacerbated by the constant rate of foreclosed homes.

Solving the housing crisis will not be easy, as lenders have increased their standards after the subprime crisis. More traditional rates and down payments are now required, making it difficult for Americans with scant savings and poor job prospects to finance a mortgage. The government has instituted several programs to assist with refinancing homes, and adding liquidity to the housing market, but the results have been marginal.