U.S. Foreclosure Mortgage Gone Up

Unemployment and risky loans are beginning to affect the Detroit's local housing market badly. This year, over 10,000 residences in the area are in the process of returning to the bank. According to RealtyTrac, this is a 121% increase from last year's data, meaning one in every 80 homes is nearing foreclosure.

The main culprit behind the problems being faced by the local housing market is the decline in the employment rate in the area, especially when big businesses such as Big Three automakers and Kmart cut the number of their workers. Families relying on only one income are now unable to support their housing needs. Since most customers do not make future considerations on buying houses, they are not able to save enough money for the payment of monthly mortgage.

The continuous drop in the prices of real estates is only making matters worse. Because people do not have equal chances of acquiring houses, recent purchasers of houses are finding it difficult to sell their houses in a price enough to pay off their mortgage. The decrease in the price also makes the properties more difficult to liquidate. For that matter, not just low-income neighborhoods are having a hard time with the situation.

The decline in the prices is then blamed to the willingness of the owners to sell their real estates at a lower price just to remove the houses as part of their assets. Because of the competitive nature of the local housing market, the price of the local housing market tends to respond to this decline. However, this is good news to first time buyers of houses because they have got nothing to lose in the first place.

Jade Amethyst www.siestakeyrealestate.com