First housing gain in 34 months

NO MORE Mortgage is happy to see the latest home price statistics, but we are cautious that a final bottom has been set. One month does not make a trend. We continue to believe that the current rally, both in home prices and in the stock market, will be tested this fall, and if the indexes are still showing signs of improvement by October, then we can take heart.

We remind investors of the terrible reality of what a 50% loss can do to an asset, whether it’s a home or a 401(k) account.

If someone holds an asset worth $100,000 that declines by 50%, it now has a value of $50,000. In order for this asset to get back to its original value of $100,000, it would have to come back by 100%. In other words, a 50% decline takes a 100% recovery to make up.

For more information on this story visit MarketWatch.

NO MORE Mortgage

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