Mortgage Rate News

One of the questions that many are asking right now is this one: When will the housing market bottom?

With the foreclosure rate still rising, and with new homeowners upside down on their mortgages, it is no surprise that people are rather worried that the housing market still hasn’t found a bottom yet. Quite recently, thought, Alan Greenspan offered his own view of when the housing bottom will be reached.

Er, sort of.

While he was quite clear about the problems faced by Fannie Mae and Freddie Mac (”Bad”), he showed a little more of the customary Greenspan-speak when talking about the housing market bottom, reports Market Pipeline:

“Home prices in the U.S. are likely to start to stabilize or touch bottom sometime in the first half of 2009,” he said in an interview. Tracing a jagged curve with his finger on a tabletop to underscore the difficulty in pinpointing the precise trough, he cautioned that even at a bottom, “prices could continue to drift lower through 2009 and beyond.”

So, the housing market bottom could be reached in early 2009. Or later.

Thanks for clearing that up.

In the end, though, when the housing bottom is reached is something that most people aren’t overly concerned with. They are more worried about things like making mortgage payments and how they are going to deal with the fact that inflation continues to rise. Forget “core” inflation. It’s the food and energy prices inflation that affect most Americans on an everyday basis. And food inflation, especially, is running away at a rather rapid pace.

In the end, if you can stay in your home, that is probably the best option. The housing market will eventually recover (although you are unlikely to score big like so many did during the last housing boom), and home prices will start to rise again. If you can ride things out for the next five to seven years, you will probably be okay.

But that isn’t much comfort for those whose ARMs are resetting — and who can’t get a refinance.

Tags: upside down mortgages, housing market, home mortgage loan, housing bottom,
Alan Greenspan, mortgage loan blog, core inflation