The path to recovery
The Mortgage Bankers Association reports that mortgage application volume is up 21.7%, but most of the volume is refinance loans, with home sale loans remaining relatively stagnant.
Home values have dipped one third from their peak according to Zillow and their Chief Economist Dr. Stan Humphries forecasts a bumpy road ahead.
Housing remains a struggling sector and while there are still hotspots like Washington, D.C. where values are performing well as are sales, on a national scale, residential real estate is hurting.
Economist Barry Ritholtz in the video above notes that the best case scenario for housing is to “drift lower.” Other entities suggest the way forward with some claiming real estate flipping is the answer to economic recovery while others are suggesting that banks experimenting with cleaning up the books by demolishing foreclosures rather than selling is the answer, while others believe that turning REOs into rentals will save housing. The National Association of Realtors’ forecasting is cautiously optimistic while some pundits claim housing won’t see a recovery even in coming years.