Real Estate Transactions Are Up, But Let’s Not Get Too Excited

Real Estate Transactions Are Up, But Let’s Not Get Too Excited
By: Nicholas A. Dunlap, CPM

An article published in the Wall Street Journal today further described the mess that is the residential real estate market. Per statistics included in the article, as many as 23% of the US or 1 in 4 homeowners currently owes more on their house than it is worth. In addition, values in some instances have dropped so far that over 5.3 million homeowners owe more than 20% over their home’s current value. Let’s not forget the bright side to the equation: over 77% of US Homeowners have equity and are not in this mess.

Perhaps the more alarming statistic was the fact that over 7.7 million homeowners are currently more than 30 days late on their mortgages. This will have a tremendous impact on credit scores and could further tighten the already constricted credit and financing market. Many of these homeowners are likely to see credit card interest rates increase as a result of their late payments, further hampering their financial situations.

Real Estate values were the topic of numerous headlines earlier this week as news sources reported that the sales of existing homes were up 10% and were at a seasonal high for recent years. The last time transaction volume was at this level was February of 2007.