Distressed loan purchaser Kondaur Capital Corp. is cautioning about housing prices falling further still. As reported recently in HousingWire, Kondaur chief executive Jon Daurio and ratings agency Moody's expect prices to fall another 20 percent. Moody's downgraded ratings on multiple residential mortgage-backed securities, stating that it sees increasing potential for a double-dip recession that would cause home prices to decrease another 20 percent. Daurio said he expects the drop to occur over the next three years.
Isolated pocket communities may experience less or have some moderate price appreciation, but those are the rare exceptions. Unemployment is unlikely to improve, rising interest rates will have a negative impact on the economy, the Home Affordable Modification Program (HAMP) is failing, credit will further tighten, and Federal Housing Administration loans will become the new subprime, Kondaur reports.
Daurio believes housing prices will hit mid-90s levels. "We haven't had this much national debt on the balance sheet before. Federal and state governments' balance sheets are insolvent. There are just far too many people with homes and loans they can't afford," Daurio said.
Advertisement
Related Stories
Single-Family Homes
What Does It Cost to Build a Single-Family Home?
A closer look at the itemized costs in each stage of construction for a single-family home
Builders
A Look at the Boom in Home Builder Stocks During 2023
In 2023, stocks for the 10 biggest U.S. home builders outperformed the S&P 500. What does that say about the housing market?
Financials
Housing Demand Could Rebound in 2024 as Mortgage Rates Ease
The Mortgage Bankers Association predicts lower mortgage rates could bring homebuyers back into the market in 2024
