Housing Market to Ignite Economy?
Can the recovering housing market lead to a economic boom?Posted on January 31, 2013 by Nikki.
Floyd Norris wrote a recent New York Times article entitled “Housing Offers Hope of Strength in the Economy.” When the market was booming several years ago, too many homes were built and/or sold to under-qualified buyers. When the mortgage crisis finally reared its ugly head, it sent the housing market into the doldrums for almost four years. It has taken a long time to rid the market of these excess homes and loan situations. Now, the inventory of homes for sale is as low as it’s been in decades. Naturally, prices have been slowly increasing in most U.S. markets, and it’s encouraging development once again.
Residential construction is at its highest levels in almost 20 years. Putting more people in homes will increase property tax revenue for the government. Furthermore, the National Association of Realtors reported that distressed sales (foreclosures, short sales, etc.) have been declining. Clearly, these sales lower the average home sale prices, so their effect will continue deteriorating, resulting in higher and higher average home prices. A good housing market will also employ more contractors, painters, construction workers, real estate professionals, etc. It will be a strong catalyst to boost the economy as housing carries an enormous influence. Karl E. Case, an emeritus professor of economics at Wellesley, said that “Housing has brought us out of every recession in the past.”
Finally, if the housing market really does start booming again, you can be sure that mortgage interest rates will start to rise as well. That’s another reason to expedite your current housing search if you are already in the market. You should try to lock in these low rates while you still can. If you would like more information on the Sunnyvale real estate market, please contact Sunnyvale specialist, Nikki Langendorf, at 1-408-896-4221 or firstname.lastname@example.org.