Consumers face debt, dropping home prices
However, many had been looking to the investments they made in their homes as an eventual way out of this debt cycle and potentially even as means for retirement.
These homeowners may be waiting for quite some time, as a new government report suggests home prices in some of the recession’s hardest hit cities may not recover until 2030. The study, which was conducted by the Mortgage Banking Association’s Research Institute for Housing in America, says its data was based on the study of 82 metropolitan area real estate markets.
The report found that California, Arizona and Nevada were the hardest hit areas, with some cities experiencing more than 60 percent drops in home values from 2006 to 2009. As a result, homeowners in these areas who have been able to keep up with payments to lenders may be forced to sell their properties at reduced prices.
In addition, the drop in values may force many individuals to hold onto properties longer, even after some reach retirement age.