Housing Takes Another Hit as 30-Year Mortgage Rates Climb Above 5%
Research firm RealtyTrac recently reported that foreclosures remain stubbornly high. Standard & Poor's has forecast home prices could drop another 7% to 10% this this year. If that is so, the value of homes in many areas will have dropped over 50% from the 2006 peak. Hard hit states like Nevada may have experienced drops closer to 70% over the same period.
The federal government still has not come up with a nationwide solution to the housing problem. The Home Affordable Modification Program (HAMP) has been a failure. The only plan that was a success, the home buyer tax credit, expired last April. Without a new tax credit from the Obama Administration and Congress, higher mortgage rates will be the straw that broke the camel's back.