Posted by Scarlett LuExpensive houses are losing more value than lower priced houses. Mortgages for expensive housing are suffering delinquency and foreclosure. Mortgage payments are increasing and wealthy homeowners are falling behind on their payments. The market for expensive homes is deteriorating more quickly than the subprime housing market. The more expensive a home is the harder it is to sell. So people are lowering the prices so someone can buy it. The number of wealthy homeowners will also decrease. People are unable to pay back mortgages. People who lost their jobs during the recession are unable to pay their mortgages. Deals are incredible for homes now. Home prices declines dramatically; it dropped by 21% from their 2006 peaks. The shrinking economy will result in additional layoffs, the unemployment rate is now 6.5% and expect to increase in the coming year, by the end of 2009, the unemployment rate is expect to rise to 9%(predicted by Goldman Sachs). Loans to buy home totaled $718 billion this year, down 2% from $731 billion last year. These days more than 40% of mortgages made at the Bank of America are for homes. Loans for homes expect to rise by 12% in 2010 as existing home sales recover and prices start stabilizing.
Makes sense that expensive houses are losing more value than lower ones because of the tax associated with them. A lot of people who buy a house they really cant afford end up losing it because they can't pay the property taxes. -Zachary Pienkowski
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