A new report indicates home prices are expected to drop 8 percent through the third quarter of 2011 due to a lack of sales. This news comes only days after a report from S&P that home prices increased more than expected in August 2010.
Home Prices Will Continue to Decline
The new Fiserv report shows that analysts still believe the economy is in a weakened state.
According to the market analytics company’s report, there will be a 7.1 percent drop in prices between June 30, 2010 and June 30, 2011. In addition, the company reports there will be another drop in prices through the third quarter of 2011 of 8 percent.
These numbers are a sharp contrast from the 4 percent gain that the company expected to see through the end of 2011.
What’s Causing the Drop in Home Prices?
The company said that despite the fact prices have risen and even that it predicted that prices would rise this year, the decrease in sales is providing no competition between properties. In other words, prices have to stay low so that the few people who are actually looking for homes to buy will be interested in what’s available.
It would seem that the low mortgage interest rates would have some impact on buyers getting out there to purchase, but some say that many have too poor of credit to qualify for the low rates–or even qualify to purchase a home at all. Those who do qualify don’t feel confident enough in their finances to make such a major purchase.
If You’re Interested in Buying a Home
Despite the tough economy and foreclosure scandals, there are some who want to get out and buy a home. If you’re one of them, keep in mind the three things you should know before buying a home.
There’s no doubt that with low home prices and mortgage rates, there are some great opportunities available. So take time to explore your options and get an amazing deal during this great time for buyers.
