In California, the rate of defaults on loans is the lowest that it has been in nearly 3 years. That’s great news for California homeowners, and it’s likely to be a self-feeding cycle, says San Diego real estate research firm MDA DataQuick. The results of recent data analysis indicate that second-quarter 2010 notices of default are down 13.6%, and that the second quarter of 2010’s total defaults was the lowest since 2007.
The report also noted that mortgage defaults had spread from lower-cost submarkets to higher ones in more expensive neighborhoods, but that particular trend may be leveling off in the next few months. Possibly most promising, however, is the fact that defaults should continue to fall simply because home prices are on the rise. While they certainly are not back to the over-inflated levels of a few years ago, seeing home values rise again is preventing many people from “opting out” of their mortgages and letting their homes go via strategic default. Assuming home prices continue to rise this trend should continue as more homeowners begin to once again view their homes as viable investments.
Do you think home prices can rise fast enough to help homeowners “save” their homes?
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