Gains Versus Inflation in Housing

 

About half of the modifications done in 2009 were behind in payments by the first quarter of 2010, according to the Treasury Department.
Courtesy of Flickr.com

If the market doesn’t fall to its natural bottom, price gains in the next five to 10 years won’t keep pace with inflation as the difference is made up on the backend, said Barry Ritholtz, chief executive officer of FusionIQ. Price increases that fail to at least match inflation are the same as reductions in value, Ritholtz said.

The Obama administration’s effort to help mortgage holders, the Home Affordable Modification Program, is another source of future inventory as owners with new loan terms re- default, Ritholtz said.

– Courtesy of Bloomberg News