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Artificially low interest rates and a government tax credit are luring buyers, but both those inducements are scheduled to end. Defaults and distress sales are rising in the middle and upper price ranges. And millions of people have lost so much equity that they are locked into their homes for years, a modern variation of the Victorian debtor’s prison that is freezing a large swath of the market.
“Plenty of pain yet to come,” said Joshua Shapiro, chief United States economist for MFR. He is forecasting an imminent resumption of price declines.
