The Median Home Price Falls Again.

Continued decline in property values results in the median home price to fall to $201,000. This marks a tremendous loss in equity that is hitting homeowners and complicates refinancing. Borrowers who are trying to take advantage of low rates find themselves unable to refinance. For buyers specially those who venture in the market for the first time, this is a bonanza. Choices abound due to high inventory. Some concerns remain as would be buyers wonder how low the market will go.

Financing terms set by lenders in response to the rise in foreclosures present a challenge not only to those with blemishes but also to individuals with good credit. The changes enacted with stimulus package, namely the increase in mortgage amounts by Fannie, Freddie and FHA will help those who are currently dealing with jumbo rates.

The National Association of Realtors indicates expects that sales that have been falling for some time will somewhat rebound later this year as the new programs bring more people back into the market. Bargain hunters are combing the market for deals eluded them during the past housing boom.

What is clear now to most observers is that the buyers are in control. Absorbing the huge inventory of homes on the market will take some time. The reduction in new construction permits issued to builders along with the many attempts to keep people in their homes through loan modifications, credit counseling and other programs such as interest rate freeze will limit the inventory.

We are still waiting for the actual loan amounts resulting from the new law. Until then we can only speculate as to its real impact on the housing market.