Fannie Mae’s Chief Risk Officer Enrico Dallavecchia predicted that housing prices will decline by 2 percent on average this year and 4 percent next year.
The declines are the result of continuing mortgage delinquencies, tighter borrowing standards, and the record levels of inventories of unsold homes.
Adding to the trouble, Dallavecchia said, is that many borrowers with adjustable-rate mortgages are facing rising monthly payments, which could drive them into foreclosure. "This could have a cascading effect in the market," he said.
Source: Washington Post, David S. Hilzenrath (08/17/07)
