Even the worst housing markets have a chance to recover

Many housing markets across the United States experienced significant drops in home values since the onset of the mortgage crisis. But some of these markets have the opportunity to increase their home prices by next year, indicating signs of a recovery.

According to 24/7 Wall St., some of the cities poised to experience a recovery were among the top 50 areas that experienced the worst price declines between the second quarters of 2008 and 2010. These cities, however, are expected to report the largest home price increase from the second quarter of 2011 to the second quarter of 2012, including Mobile, Alabama; Syracuse, New York; Las Cruces, New Mexico; and Niles-Benton Harbor, Michigan.

Many homeowners in these markets and other cities across the country may have lost a home to foreclosure during the crisis and could feel despondent in regards to purchasing another home in the future. Scott Clifford, a real estate attorney, said in a piece for Housing Predictor that foreclosures do not mean consumers will never be able to acquire another mortgage again. Rather, if a foreclosure is an isolated incident on a credit report, homeowners will be able to improve their score with a few tweaks and qualify for another mortgage shortly.

Clifford said most foreclosures remain on a credit report for seven years, but lending companies often consider applicants just two years after a foreclosure if they are in good financial standing and have improved other aspects of their score. While waiting for the grace period to expire, buyers can build up their savings and pay down credit card debt to achieve a lower debt-to-equity ratio.

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