Categorized | Residential

Experts Push for Principal Cuts for Struggling Homeowners

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With the housing market still in shambles, real estate experts believe that more must be done to improve the overall condition of residential real estate. They believe that the economy as a whole is struggling due to the weakened housing market, and that until an adequate solution is found, the trend will likely continue.

A group of real estate experts are now pushing for a complete reduction of principal for many homeowners. They believe that a move to reduce the amount of money owed by homeowners would provide a much-needed boost to the economy by cutting back on the number of underwater mortgages and potential foreclosures.

The government has most recently sought to extend record low interest rates with the hope that they will entice new homebuyers to enter the market. However, because lending restrictions are tighter than they’ve been in recent memory, the low rates are having, at best, a very minimal effect on the health of the residential real estate market.

Experts believe that the low interest rates will continue to have only a minimal impact on the market, as confidence remains low. They claim that such measures only serve to benefit the banks, and not the market as a whole.

In addition to reducing the principal on all mortgages, experts also believe that the government should consider purchasing foreclosed properties with intentions of converting them into government rentals. The thought is that such a move would take the foreclosures off the market, thus decreasing supply, and increased demand and overall housing prices.

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About James Pattric

James writes for the Residential category (along with Josh Johnson) and also heads up the Resources category.

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