National Housing Values Plunge To Lowest Level In 35 Years

1/30/2009

posted by N. Sioris

Stumble It!

According to the National Association of Realtors' Home Affordability Index, "homes haven't been this affordable for the typical buyer since the early 1970s." The index takes into account the median home price, median income and mortgage rates to determine how financially fit Americans are to buy a home.

Five years ago the national median home price was $178,500. Three years ago the median price was $216,800. One year ago the median price was $197,200. And, as of December of 2008, the national median home price was $174,700.

Unfortunately, these statistics can be a double edged sword. Job losses are expected to be between 300,000 and 500,000 a month this year, according to Jeoff Hall, an economist at Thomson Reuters, which of course pulls huge numbers of potential buyers out of the market.

Patrick Newport of IHS Global Insight said; "Prices are collapsing and will probably drop another 15 percent." He does not see a bottom in home prices until the first quarter of 2010.

For all our sake, let's hope these predictions do not come to pass.

If you think you will need to tap into home equity to supplement retirement, you may wish to proceed with a reverse mortgage now, before home prices drop further. The amount of money you will be allowed to access through a reverse mortgage is heavily dependent upon the value of your home.