Insurer’s CEO made a call to American journalists to protect equity.
As a result of massive losses suffered by homeowners over the last six years, and the ongoing instability and uncertainty in the housing market, efforts such as home value insurance for the protection of equity are becoming highly important across the country.
This, according to CEO Scott Ryles, of Home Value Insurance Company.
He gave this message while addressing the journalists specializing in real estate who were in attendance at the 46th Annual Meeting of the National Association of Real Estate Editors. In his speech, he said that “Many Home Value Protection policyholders live in areas where housing prices continue to decline.”
Ryles went on to explain that “The financial impact of the loss of equity has been devastating, both to the national economy and to millions of homeowners who rely upon their home’s equity to finance their next home purchase or their retirement.” He quoted the data from the Federal Reserve which was released in June and showed that there was a decrease of 40 percent in the net worth of households from 2007 to 2010. The main cause of this drop was housing prices.
CEO Ryles pointed out that since that time, housing prices continued to fall.
He also explained that even in a stronger economy, there is always a variance in local housing performance, as there are many examples of increases and declines of 10 to 20 percent over the last four decades.
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Into the future, the impact of the Baby Boomers will be a key element to the way that housing prices and household worth will move. Ryles noted that individuals in that generation who do not have adequate retirement assets won’t have any choice but to sell their homes in order to be able to afford their living and medical expenses. This will flood the market with homes for sale all in one massive wave, which cannot be filled by the new entrants to the housing market during that time.
Today’s homeowners simply cannot assume that the value of their properties will grow over time, making home value insurance a product that will only increase in its importance over the upcoming years.