More Metro Areas Saw Home Prices Rise in First Quarter

More metropolitan areas in the U.S. saw home prices rise in the first quarter of 2010 from a year earlier, according to the National Association of Realtors (NAR). The NAR’s latest housing survey found that median home prices rose in 91 out of 152 metropolitan areas; 29 of those areas had double digit gains, 58 had price drops, and three were unchanged. This could be good news if you are hoping to tap home equity to borrow a reverse loan.

National Home Prices Show Little Change

The national median price of existing single-family homes was $166,100, compared with $167,300 in the year-earlier quarter. About 36% of home sales were distressed homes.

Buyer confidence is back, and home buyers have long-term views. “The typical buyer plans to stay in the home for 10 years, so we’ve put the flipping mentality behind us and most people see housing for what it is: shelter that provides social benefits and is also a good long-term investment,” said Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.

Reverse Mortgages and Home Values

There are pros and cons for reverse mortgage loans, including the fact that housing values have dropped over the past few years. The amount a homeowner can get by borrowing with a reverse home mortgage is based in part on the value of the property. Falling home values can seriously depress the amount of equity a person has available for a reverse mortgage.

But if home prices are beginning to show gains in your area, it could make sense to have an appraisal done to get an idea of what your home is currently worth. A local real estate agent can also do a comparative analysis of recent home sales in your area. Get as much information about the local housing market before beginning reverse mortgage counseling and applying for a loan.

This entry was posted on Tuesday, May 11th, 2010 at 7:21 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.