Lowell Deeds

According to stories in the Globe and the Lowell Sun, David Lereah, chief economist for the National Association of Realtors, and Cathy Minehan, president of the Federal Reserve Bank of Boston, both stated yesterday at the New England Realtors Conference in Boston that they expected the regional housing market to remain healthy and even bounce back from its current slump through the remainder of the decade. Both did acknowledge that the market has slowed, but emphasized that such a turn must be placed in the context of the five-year expansion that saw historically high increases in home prices in New England. Still, Lereah cited a high level of existing debt, slow sales, and homes remaining on the market for longer as reasons for concern. Both Lereah and Minehan seem to discount the threat posed by declining prices in a time of rampant 100% financing of new home purchases. If someone bought at the peak of the market and borrowed the entire purchase price (which is what we see, more often than not, at the recording counter), if the value of that house declines even slightly, the new owner is stuck owing more than the house is worth which is fine so long as the owner can continue making the mortgage payments.