As home prices decline, Southern Californians who bought at the peak are nervous
Surging mortgage interest rates threatened to squash Michael and Christine Hawkins' dream of home ownership. But this fall when the couple saw a Canoga Park condo languish on the market, they devised a plan.
They'd submit a "low ball" offer they could stomach if they cut back on vacations, shopping and eating out. In a year — when interest rates hopefully had dropped — they could refinance and free up their budget.
Last month, amid a decline in overall home values, the Hawkinses, both in their 30s, closed on the two-bedroom condo for 7% less than asking. But they may be stuck with a high payment for the foreseeable future, because if home prices keep falling, they might not have enough equity to refinance.
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