Home prices are the lowest in a decade. How can the economy recover?
FROM CNN's Jack Cafferty:
Home prices are at their lowest in a decade.
The S&P/Case-Shiller home price index of 20 cities shows an average decline of 3.5% from a year ago. That puts home prices at the lowest since November 2002. Experts say foreclosures and other distressed property sales are the main challenge.
Some of the hardest hit housing markets include Atlanta, Charlotte, North Carolina, Chicago, Las Vegas and New York.
The worst is Atlanta, where prices fell more than 17% year-over-year. Home prices in Atlanta haven't been this low in 16 years.
These numbers are scary:
For many Americans, their homes are their biggest asset. It's hard to imagine how the nation can manage an economic recovery with the housing market still hurting so badly.
And things might not improve for a long time. A very long time.
Yale University Economics Professor Robert Shiller says a total recovery of the housing market may take a generation. Shiller says he worries "that we might not see a major turnaround in our lifetimes."
And it's not just home prices that are suffering. A new government report shows new home sales dropped 7.1% in March to the lowest level since last November.
There's just no rush to buy. Mortgage rates might be at record lows, but if people don't have the money to buy it doesn't matter. Add in high unemployment along with high gas prices and uncertainty about the health of the economy and the future of housing looks pretty grim.
Here’s my question to you: Home prices are the lowest in a decade. How can the economy recover?
Tune in to the Situation Room at 5pm to see if Jack reads your answer on air.
And, we love to know where you’re writing from, so please include your city and state with your comment.
How have collapsing home prices impacted you?
FROM CNN's Jack Cafferty:
Shocking new numbers on the housing crisis which show home prices down nearly 33% since peaking in the summer of 2006.
Translation: the value of many Americans' biggest asset has dropped by one-third in just the last 5 years.
The latest S&P/Case Shiller 20-city report shows home prices posted a steep drop in November, falling 1.3%. Some of the hardest-hit cities include Chicago, Atlanta and Detroit.
Compared to a year ago, home prices are down close to 4%.
Experts say that home prices are still falling despite record low interest rates and better GDP growth. They think prices will continue to drop this year and maybe even into next year before finally stabilizing.
Some suggest prices are down in part because more sellers are willing to accept the weak market conditions and lower their asking prices.
Also playing a role is the increase of sales of properties in foreclosure - look no further than Nevada, the site of Saturday's caucuses, which is the foreclosure capital of the country. Arizona and California also suffer from some of the highest foreclosure rates.
Meanwhile the U.S. Census Bureau says that the nation's homeownership rate has fallen to 66% - the lowest in seven years.
Economists tell USA Today that while the housing industry's downturn may be nearing a bottom, the impact will be felt for years.
They say even for people who want to buy a home, they may have difficulty getting financing for a mortgage.
In short, we've got a long way to go before the housing market rebounds.
Here’s my question to you: How have collapsing home prices impacted you?
Interested to know which ones made it on air?
Home ownership levels are on the decline. What does that say about the American dream?
FROM CNN's Jack Cafferty:
More than two-thirds of Americans say they have achieved the American Dream or will do so at some point in their lifetime according to the Pew Economic Mobility Project. But a new report out today says one crucial part of the American dream is no longer a reality for many Americans: Owning a home.
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2011/images/05/31/art.sold.jpg caption=""]
The rate of home ownership in this country is now back to the level it was in 1998. Forget the housing boom-it's like it never happened. And some economists and industry experts say the home ownership rate could drop even further to the levels of the 1980s or earlier.
Last year, 66.4% of Americans owned a home, down from a peak of about 69% in 2004. Housing prices fell in March to their lowest level since the so-called Great Recession began. This is all according to the Standard and Poor's Case Shiller Home Price Index, considered one of the best indicators of the housing situation in the country.
According to a survey from real estate websites Trulia and RealtyTrac, 54% of Americans said they thought the real estate market would recover in 2014 or later. That's up from about one-third who gave the same answer when the same poll was given last November.
The outlook is pretty bleak. Unemployment and bad credit are preventing many Americans from buying a home. Others are struggling to hold on to what they already own, either underwater in their homes– meaning the home is worth less than their mortgage - or facing foreclosure. And then there are those who have the money to buy a home but are choosing not to...often out of fear the worst is still to come.
Here’s my question to you: Home ownership levels are on the decline. What does that say about the American dream?
How much were banks to blame for the financial collapse?
FROM CNN's Jack Cafferty:
Congress is trying to get to the bottom of the financial meltdown that practically brought the country to its knees.
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2010/images/01/13/art.lloyd.sachs.jpg caption="Goldman Sachs CEO Lloyd Blankfein testifies during the first public hearing of the Financial Crisis Inquiry Commission on Capitol Hill."]
There were some tense exchanges on Capitol Hill today... with a bipartisan commission grilling the heads of Wall Street's top banks about who was to blame for the biggest downturn since the Great Depression.
The bank chiefs testified under oath about their institutions' mistakes that led to the crisis... things like the housing bubble, "new and poorly underwritten mortgage products" and "excessive speculation."
These banks bundled mortgages and sold them as investments. But when people began to default on the mortgages because they couldn't afford them in the first place, the bottom fell out.
At one point - Goldman Sachs CEO Lloyd Blankfein compared parts of the financial crisis to an earthquake and similar acts of God. Nice try. The commission's chairman - Democrat Phil Angelides - immediately pointed out: "These were acts of men and women."
The heads of three other big banks - JPMorgan Chase, Morgan Stanley and Bank of America - also testified. They all tried to walk the fine line of owning up to what happened... while pushing back against potential government reforms that they think would go too far.
There's a lot of anger out there directed at Wall Street. Since the start of the downturn, seven million Americans have lost their jobs and more than two million families have lost their homes to foreclosure.
But the banks were given hundreds of billions of dollars in taxpayer money to keep them afloat, and to this day they continue to pay out record bonuses. And they are making profits like they've never made before.
Here’s my question to you: How much were the banks to blame for the financial collapse?
Tune in to the Situation Room at 5pm to see if Jack reads your answer on air.
And, we love to know where you’re writing from, so please include your city and state with your comment.
Housing market better or worse than 6 months ago where you live?
(PHOTO CREDIT: GETTY IMAGES)
FROM CNN's Jack Cafferty:
There are some signs that the nation's beat-up housing market might be starting to recover...
USA Today reports that more homes for sale are now getting multiple offers as buyers are trying to lock in deals at low prices. Real estate experts say this has especially been the case in states like California that are hit hard by foreclosures and dramatic price drops.
One Florida realtor says that one in 10 homes now gets multiple offers - that's up from one in 30 last fall. The competition for some homes is driven by low prices - down almost 40 percent in some places - low mortgage rates, and also a new tax credit of up to $8,000 for some first-time buyers.
Meanwhile first time owners are now buying more than half of all homes; and experts say they could help the industry by snapping up much of the excess inventory.
There are other positive signs:
– Pending sales of existing homes just posted their first back-to-back gains in almost a year.
– Construction spending unexpectedly rose, ending a six-month slide.
– And, one report shows the decline in home prices in 20 major cities slowed during February for the first time since 2007.
– When you add in some scattered signs that the job situation is not unraveling quite so fast and an uptick in consumer confidence, you have the makings of a better spring than a lot of the experts expected.
Here’s my question to you: Is the housing market better or worse than it was 6 months ago where you live?
Interested to know which ones made it on air?
How should the government help homeowners?
From CNN's Jack Cafferty:
Home foreclosures were up a record 81% in 2008…that's a 225% increase since 2006. If that doesn't get your attention how about this: more than 3 million foreclosure filings were issued last year and more than 860 thousand families lost their homes.
Should the government be doing anything to help homeowners?
Some say that number is on the low side, and this year things may get worse. Efforts to stop or even slow the crisis have failed. The two government- sponsored mortgage companies, Fannie Mae and Freddie Mac, temporarily suspended foreclosures at the end of November. But foreclosures in December were higher than in November. The experts are now predicting we could see another 3 million foreclosures this year.
The rest of the problem is tied to collapsing prices. The S&P/Case-Shiller Home Price Index says home prices have dropped 21% on average nationally from their peak, and in some of the worst hit areas, like Phoenix, they've dropped as much as 40%. What this means in many cases is that people who can no longer make their mortgage payments also cannot sell their house for enough to pay off their mortgage. The houses are worth less than what is owed on them.
Here’s my question to you: What should the government be doing, if anything, to help homeowners?
Interested to know which ones made it on air?
@jackcafferty on Twitter
Recent Comments