(EMAILWIRE.COM, March 08, 2008 ) SACRAMENTO, Calif – On Thursday March 6, 2008 the Federal Reserve reported that during the final three quarters of 2007 the amount of equity that Americans had in their homes dropped to below 50%. This is the first time that Americans have owed more on their homes collectively than they have owned since 1945. This statistic shows that American homeowners borrowed large amounts of money against the value of their homes in recent year.. For homeowners who are trying to sell their properties to avoid foreclosure this statistic indicates a difficult market reality.

Mark Zandi, the head economist for Moody’s said “Consumers are growing more cautious, first, because they are now worth less, and they know it. He added, “Secondly, they can’t borrow against their homes as aggressively as they did.

Economists point to falling home equity and link it to lessened consumer spending in other parts of the economy, especially home improvement and construction spending. When this trend will reverse itself is anybody’s guess, but the consensus among real estate experts is that housing prices will continue to decline until sometime in 2009.

Approximately 10% of American houses, or 8.8 million, are estimated by Economy.com to have ‘negative equity.’ This means that more is owed on a house than the current market value. Governmental fixes to this problem appear to have driven a wedge between Federal Reserve Chairman Ben Bernanke and the Bush administration’s Treasure Secretary Henry Paulson. Bernanke recently came out in favor of urging lenders to write down principal amounts owed by homeowners while Paulson has spoken out against such a practice.

“Falling home equity has definitely caused a lot of people to think twice about trying to sell their house now. Yet, we are still helping hundreds of homeowners a week who want to understand their options when they choose to sell a house,” said foreclosure expert Patrick McGilvray, president of Sacramento, California-based http://www.TheHomeBuyingCenter.com

McGilvray added, “We’re helping hundreds of people every month buy and sell houses, and it’s a great time for prospective home buyers who are looking for a bargain on a foreclosure house. For people with a good job and a decent credit rating there are incredible deals out there in great neighborhoods.”

Despite the often gloomy news about US real estate, the National Association of Realtors reported that prices for housing actually rose in more than 70 metro regions, including a handful that reported increases of more than 10%.

Contact Information:
The Home Buying Center, LLC
Patrick McGilvray
Tel: 916-920-3278
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