Despite historically low mortgage rates and an excess of inventory, the housing market has yet to bounce back. The initial problems hindering the housing market were fueled by a boom and bust cycle in the real estate market and the problems are being compounded by the continuation of the Great Recession.
Despite the Government's efforts in providing financial assistance to individuals crippled by mortgage woes, the downward spiral of the housing market is set to continue with no immediate relief in sight. There is a multitude of factors negatively influencing the industry and holding the housing recovery back. Experts believe housing recovery will take years to snap back into place.
Housing Market Yet to Hit Rock Bottom
New statistical data from the US Housing Market Monthly (Capital Economics) indicate that home sales are poised to decrease dramatically over the next few months, further hindering economic rebound in the real estate sector. The continued decrease in home value is being fueled by supply and demand. The market is flooded with a surplus of inventory from private sellers, the U.S. Government and real estate owned (REO) properties. Because all home sellers are competing for the same consumers, many sellers have reduced their asking prices by an average of 25 percent as a way to stay on level with the market as a whole.
Unemployment Statistics
No one can deny that the real estate market is tipped in the favor of homebuyers. While the American Dream of homeownership is still alive and well, the problem is that very few people have the financial resources or credit scores to allow them take advantage of the amazing opportunities.
Real estate website Trulia.com recently released the results of their American Dream Survey, and while the news indicates that 72 percent of Americans still long to own their homes, money is a major factor preventing them from pursuing their dreams. Statistics from the report show that 47 percent consumers would be interested in purchasing a home within the next year if they were able to build up sizable nest egg.
For over a year, national unemployment rates have been hovering around the 9.5 percent mark and Moody's research has predicted that unemployment statistics will surpass 10 percent by the conclusion of the year. Until those numbers are stabilized, consumers will not feel comfortable taking on the financial burden of homeownership and that will hold the recover back.
Underwater Mortgages
Statistics issued by research firm First American CoreLogic have indicated that nearly one in four homeowners are underwater on their home loans, meaning that they own properties worth less than their current mortgage debt. That tide will only turn when home values increase to the price of purchase. This recovery is expected to take years and will further hinder a housing recovery.
While this is certainly bad news for the economic state of the nation, there is a silver cloud for those ready to take the leap into homeownership. Mortgage Marvel has the latest technology to provide you with the current mortgage rates in real time and without requiring your private information.
