Real Estate On The Ropes

Posted By on December 7, 2010

A report out of RealtyTrac talks about “the new normal” thinking!

Two-thirds of mortgage holders said they would consider trying to modify loan terms if they couldn’t afford their payment, Trulia and RealtyTrac said. Almost half would think about halting payments altogether if their home value fell below the loan amount.

Mounting foreclosures and an unemployment rate close to 10 percent are delaying a recovery in the industry that triggered the worst recession since the 1930s. Home sales tumbled 21 percent in the third quarter from a year earlier and half of U.S. metropolitan areas showed price declines, the National Association of Realtors reported last month.

Demand is unlikely to pick up soon amid a “catastrophic drop in confidence,” Robert Shiller, a Yale University economist and co-creator of the S&P Case-Shiller Index, said in a Nov. 30 Bloomberg Television interview. The home-price gauge has dropped 29 percent since peaking in 2006.

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