An Overview of US Real Estate Trends
Posted by RealEstate_Guru
Real estate trends can be tricky to predict. Although such trends are often responsible for significant market changes, the number of factors that contribute to real estate market behavior often makes trends difficult to analyze and predict. However, there are some baseline trends in real estate that are so strong that they merit a closer look.
Since January 2009, mortgage rates have been at their lowest since 2004, according to Freddie Mac. Freddie Mac is a nickname for the Federal Home Loan Mortgage Corporation, an entity authorize the US Congress to provide a secondary market for residential mortgages. A secondary market occurs when the lender (such as a bank) that holds the original (or primary) mortgage on a property chooses to sell it rather than hold it. Entities like Freddie Mac are then free to purchase the mortgage. In today’s challenging economic climate that’s fraught with inflationary pressures, investors are looking for security and this makes government-backed instruments especially attractive.
Along with more affordable mortgage rates, home prices are also falling. Since 2006, home prices have declined an average of about 21%. While this may not be good news for home owners or sellers, it’s great for buyers and is likely to stimulate demand, especially among bargain hunters.
Finally, there’s been a decline in new housing starts that’s the lowest since the late 1950s. Again, this is a double-edged sword because while it depresses the construction industry, the lower overall number of new homes on the market will help alleviate the surplus of unsold homes.
Uncategorized
Leave a Reply