From a reputable source. Thanks to Business Week.
Countrywide Financial Corp. is the nation’s largest mortgage lender, handling nearly one out of every six new mortgages in the country. So it’s worth taking note when the company’s in-house economist predicts a big change in home values. “The most likely secnario for housing prices over the next year or so is a significant slowdown in the overall rate of appreciation, down close to zero,” Jeffrey K. Speakes writes in his latest Economic Outlook letter. Speakes’ reasoning is simple. Home prices have risen too far, too fast, exceeding income gains for the past five years. Rates are heading up. He’s forecasting price declines in some local markets. No company has done more to keep home prices heading up than Countrywide. This forecast probably wasn’t easy for them.
Just another case of Chicken Little? I don’t know. Rates have been rising fairly consistently for the past several weeks. The market remains very, very active in the Charlottesville area … time will tell. I am not making any predictions yet.