Housing Market That Caused Recession May Fuel Recover reports Greenwich Moves
(EMAILWIRE.COM, December 29, 2012 ) Greenwich, CT -- While many are aware of the real estate market being a prime culprit in the United States' recession half a decade ago, now things are beginning to turn. That means the sector that wrought so much trouble before, could end up being the very market that is capable of fueling the recovery of the nation's woes.
Macroeconomic advisers projected that the U.S. Economy will grow at 1.4% over the last quarter of the year, with housing accounting for nearly 30% of that growth. IHS Global Insight stated a forecasting of 1% growth rate, with housing accounting for over half of that growth (53%). That would mark the largest contribution since 2005.
The years of foreclosures and plummeting prices took their toll, without doubt. Many owners still hold mortgages that keep them 'under water' wherein the amount they owe is more than the value of the property.
Banks are still highly wary of lending to prospective buyers, but there are shortages of new construction, and banks will be more inclined to lend to developers given the recent reduced risk.
Reports are coming through of mortgage profits that are setting records due to increased demand for loans and refinancing of existing loans. New home-equity credit are projected to make large increases. According to Moody's analytics, a bump of 22% can be expected.
According to the S&P/Case-Shiller numbers, home prices increase 3.6% in September. Then there are reports that home prices increase 7% for nine months of 2012, and the market is looking healthier than it has since 2005. There is also reason to be optimistic of the forecast for the remainder of the year as well.
Another recent study noted 18 of 20 cities have seen gains in their year-to-year totals. The only cities slowing or stagnant were New York and Chicago.
The increase in rent and the size of families has increased need to purchase homes. Demand has driven inventories down the levels not seen for a decade, and the National Association of Realtors report sales of existing homes at 11% higher than last year.