The nation’s housing crisis, regrettably, is only worsening as signs of a recession and sky-high food and gas prices crunch into the public’s budgets. According to a poll conducted by the Associated Press and AOL Money & Finance, over a quarter of homeowners are worried about losing home value in the next two years, while around 60 percent of people are “definitely” not buying a home in the next two years.
Why Home Buyers Staying Out Of The Housing Market
While the housing market is excellent for buyers, many cannot afford to buy a second home and wait for sellers to show up. Only 11 percent of people polled were certain or very likely to buy soon, while one in four people believe that the value of their home will continue depreciating.
Buyers are reluctant partly because they feel the current market is has not yet bottomed out. While people are interested, they want to wait until the prices continue falling. Although this means some great bargains for homebuyers, it puts more stress on the economy and homeowners who are looking to unload mortgage payments they cannot handle.
Why Homeowners Are Losing From The Housing Market
Even though 59 percent think now is a good time to buy, half of those polled think it is a tough market to break into for first-time buyers. This is probably partly due to the stricter lending requirements that banks and mortgage companies are imposing, thereby locking out first-timers who may not have the best credit record and lack experience in buying real estate.
The poll also indicated that one in seven mortgage holders are afraid they will be unable to make their monthly payments on time in the next six months. One in ten homeowners has an adjustable mortgage rate, which is making the increased interest rate a financial issue for many, with foreclosures at a record high inducing fear in buyers and owners alike.
Some Good News For Homeowners and Home Buyers
As home values drop and sales fail to increase, there is still some hope for homeowners. Homeowners who bought their house in the last few years will feel the loss, but those who purchased around 2001 should retain their home’s value. Even for others, the prediction is that the value is going down temporarily, even if it is impacting homeowners directly at the moment.
For homebuyers, the good news is that if there are savings in the bank and a good credit history, buying a new home is a very real possibility. Since sales have plummeted and many people who would be swarming the market are busy trying to sell their homes, serious buyers can bargain down or buy fixer-uppers in foreclosure auctions. Even though the U.S. housing market is shrinking, ready buyers can act now and save big on buying a home.
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