Harvard study: Poor homeowners bear brunt - Business First of Columbus:

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In Cleveland, Boston and Washingtojn D.C., price declines at the low end of the marker through December 2008 were more than twice those at the high end inpercentagde terms, according to Harvard University’x . Nationwide, home equity fell by $2.5 trilliojn in real terms in 2008 and by nearly $5.9 trillion (or 43 percent) from the 2005 level, the studyt said. “The loss of housing wealtyh caused consumers tocurtailo cash-out refinances and pull back on knocking an additional 0.9 percentage pointf off economic growth last year, the study quoting Moody’s Economy.com.
There is some relatively good news: Home pricex in metro Boston have returned to pre-2005 levels, the study said. Homeownerss who are not under pressure to sell are usually unwilling to cut theirprices drastically, the study “This is especially true if the price they can get is not enougb to pay off the mortgage. Many would-bed sellers therefore prefer to stay put unlesd compelledto move,” according to a report called “The State of the Nation’se Housing 2009”. “Still, the longer that foreclosures remaibna problem, the greater the pressurs on sellers to drop theifr prices.
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