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Prices of US Homes Dipped Due to Foreclosures

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By : John Cutts    99 or more times read
Single-family homes have decreased in prices, reaching values that are the lowest in five years. Prices have dropped by around 12 percent, due to the increasing numbers of foreclosures. At present, a single-family home is prices to a very low value of $180,000, the lowest price since 2003.

This in turn has also caused an increase in home purchases. According to National Association of Realtors President Charles McMillan, sales associated with foreclosures have increased by 38 percent, as a lot of those who are capable of purchasing properties are taking advantage of the low prices of properties. People are clearly seeing value in the current prices of houses.

This is an issue that is currently set to be addressed by the new administration under the presidency of Barack Obama. A $50 billion worth of rescue funds dedicated to stemming foreclosures is set to be released soon. In the meantime, states and other institutions are calling on banks and other lenders to halt foreclosures until the rescue fund is released. The fund will be distributed among banks so that they can create new adjustments such as moratoriums and mortgage adjustments to give more time to people who are facing foreclosures.

According to Lawrence Yun, chief economist of NAR, the current dip in house prices is brought about by the general situation of the economy. Due to the economic recession, companies have cut down on employees, causing a lot of Americans to lose their jobs and not be able to pay their mortgages.

He said that if the government will be able to implement its bailout plan on rescuing foreclosures, people will have more confidence and will be able to recover faster out of the economic crisis. At present, the government is laying out plans and meeting with major financial institutions within the country and even at a global level, to give strength to the ailing economy of the world. Yun further added that if enough encouragement will be given to homeowners, there could be a significant increase in home prices as the spring home-buying season comes.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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