Homeownership ratesfalls to 66% as downturn nears a bottom – USATODAY.com
Falling homeownership — and prices — reflect the worst housing downturn since the Great Depression. And while there are signs that the housing industry's downturn may at least be nearing a bottom, the impact of the collapse will be evident for years to come, economists say.
"Nearing a bottom," they say. Maybe not. Mortgage interest rates are absurdly low and they have to go up to at least 6% at some point. When that happens, people will find it harder to buy houses because the cost of money will raise their monthly payments. When money is cheap, demand goes up and that drives prices up. When money is expensive, demand goes down and that drives prices...down. So I think that when mortgage interest rates go up, as they must, housing prices will go down.
And that will increase the financial pressure on home owners, who will see more of their equity disappear. That, in turn, will raise foreclosure rates, which will mean increased economic stress on condo associations and HOAs.