Home prices will fall another 10 percent before they stabilize in the second half of next year, Roelof Slump, Managing Director of Structured Finance Experts for Fitch Ratings told investors Thursday.

Slump said the inventory of distressed properties remains high and is expected to cause further home price declines, plus negative macroeconomic trends are expected to continue to impact the mortgage market.

The brightest spot Slump saw in the housing picture is a decline in delinquencies, which are still high but have been improving this year. Although liquidations have slowed, he said that the pipeline of distressed borrowers remains high. With seven to eight million homes in the distressed inventory, the backlog will put pressure on prices and likely cause further price declines.

Consumer confidence is the key to restoring demand in the wake of the expiration of the homebuyer tax credit, he said. Slump forecast an end of the price increases during the first half of the year that were generated by demand stimulated by the credit.

Investors can expect mortgages to continue to perform better than those during the boom period, he said A stable banking sector, improved loan underwriting, greater affordability for new borrowers, tighter regulations and improved.

Posted in: Housing Market
Tags: consumer confidence, distressed inventory, distressed properties, homebuyer tax credit, mortgage market, price declines

Despite the repeal of a rule unpopular with appraisers and agents alike, low appraisals are still killing deals across the nation, slowing sales at a critical time in the housing markets.

Since the housing bubble burst four years ago and values began to fall, appraisers have been under fire for failing to account for actual market conditions. A new home valuation code of conduct enacted in 2008 by Fannie Mae and Freddie Mac was blamed for contributing to inaccurate appraisals, but the controversy over low appraisals continues despite the code’s repeal this year.

Whether it’s for a purchase loan or refinancing, a low appraisal can kill a deal. And the risk of that happening is greater now since the subprime mortgage meltdown and the housing market crash. Appraisers are being pushed to be more conservative, prices are soft, and comparative properties hard to come by.

Foreclosures, which are typically discounted 30 percent or more below the going rate, continue to exert a huge influence on local market values. In June, the distressed property share of the overall national home sales fell to 24 percent, down from a peak of 35 percent in early 2009, according to CoreLogic. But now that the homebuyer tax credit has ended, the market share of foreclosures is expected to rise.

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Posted in: Housing Market
Tags: appraisal value, comparative properties, fannie mae, fannie mae and freddie mac, foreclosure sales, freddie mac, home valuation, homebuyer tax credit, housing bubble, housing market crash, local market, market values, subprime mortgage meltdown

Although we have a bad economy, purchasing a bigger house remains to be tempting. Who would not want to trade their smaller house for an inexpensive bigger home? However, is this a good idea? Is it really a good time for a trade up?

Well, a trade up is a good idea. We are in a buyers’ market and everything is going in our way. We can easily find retirement home or vacation homes at a very low price. Although this is the case, it is crucial that we consider various factors first.

Trade up is good if you have investment in mind. Think about it, if you sell your home and purchase a bigger one, you can have the other rooms rented. You can even purchase a two-unit home and rent out the other unit. This is a great idea because the number of tenants has risen. You will have a better home, and you will not need to worry about paying the mortgage. But before house hunting, make sure that you keep these three important things in mind to avoid problems:

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Posted in: Home Buying
Tags: economy, Home Buying, mortgage, move-up home