Home Prices, Foreclosures are hot topics

Home prices in the nation fell 3.2% in the 2^nd quarter of the year, which rates as the steepest decline since the rates began being recorded in 1987. As housing prices throughout the country continue to decline, there is no evidence of a recovering real estate market in the near future. According to economists, the residential market shows no sign of slowing down its declining prices. This news came shortly after the National Association of Realtors (NAR) stated that for the 5^th month in a row, the sales of existing homes had declined. The number of homes that are unsold has shot up to a record level. A different index that records the markets of 20 major US cities found that prices in these cities fell 3.5% between June 2007 and June 2006. A separate index found that in 10 cities, the prices declined by 4.1% in the same timeframe. The housing market is extremely vital to the American economy and it watched closely by policymakers in the Federal Reserve.

Americans have seen home prices rise continuously for 5 years, until 2006, when prices stalled, and started to fall in 2007. As a result, getting a new mortgage has become tougher, as lenders are making it more difficult as scrutiny is being focused on lending standards. Standards are being tightened as the foreclosures rate as risen as many cannot afford the mortgage they took out, whether because they were unable to cash in on their homes equity, unable to refinance, unable to sell, or unable to afford the increasing interest rates if they obtained an adjustable rate mortgage. The federal government has begun to take steps to help the real estate market, and many believe that the fed will soon cut interest rates to help protect homeowners. The current rate, at 5.25% has been the same for over a year. The fed meets on September 18, and it is expected that the market will be a top priority. As many homeowners are facing foreclosures, interest rates, lending practices and the real estate market have become a hot topic for candidates vying for a spot in the 2008 presidential election. The issue of foreclosures is sure to gain more focus if the current situation does not improve, or worsens.