-Foreclosures are down.
-Home prices are rising.
-Home sales and construction is up.
-Mortgage rates are still at rock bottom.
This is the perfect climate for an explosion in the housing market. Even though many experts expect a slow and steady climb, a few are predicting a much stronger recovery.
Demand for More Housing
Experts who believe that a strong increase in sales is likely say that the market has been well below normal for 5 years, and that has resulted in more people who are waiting to see an improvement. They will flood the market as things continue to improve. They also expect housing prices to start seeing gains of between 5 and 7.5 percent per year.
Others predict an increase of at least 20 percent in new construction for each of the next two years. These predictions are bolstered by the numbers we are already seeing. Housing was up again in September by 15 percent, with 11 percent towards increase in new home construction, and another 25 percent in apartment construction. That kind of improvement will mean more jobs in the industry.
The Ripple Effect
As the housing market sees an improvement, it will extend into other areas, too. The housing business is already seeing an increase in the price of stocks, and that is expected to continue into relevant industries, such as carpeting, drywall, kitchen fixtures, and others. This will bring an increase in jobs in these areas, which will allow more people to afford a home, driving sales and demand even higher.
Analysts predict that four million jobs will be added to the economy over the next five years. This will bring about an improvement in the nation’s economy in many areas. Historically, the housing market has had a strong influence on the rest of the economy, and that trend will continue.
Strict Lending Requirements
The one thing that could hold back this major improvement is the difficulty for homeowners in getting a loan. Because of the housing collapse and the massive number of foreclosures that resulted, many lenders have raised their lending requirements. This makes it difficult for borrowers to qualify for a loan and limits the number of people who can buy a home.
Experts say that the increase in sales is due in part to corporations buying up cheap properties that are not the traditional buying market. Until more buyers can qualify for a home loan, experts predict limited improvements.
Regardless of the limitations on the lending industry, the numbers are making people more hopeful. An improvement in the housing industry will help other areas of the economy. Even if the predictions prove incorrect, things are heading in the right direction. In this case, all news is good news.