Posted 7:15 PM 06/06/11

Will US Housing Prices Rise?



Actually, almost everybody wants to know and worry about housing prices and frankly speaking very few people want them to rise. Here we are going to find out if housing prices grow. It's really true that despite the fact that prices have recently calmed down, lots of different reasons can influence them. While we were studying some statistics, we have come to the conclusion that housing prices won't grow and here are some reasons for it.

One of them is unemployment. The situation is that lots of people are unemployment nowadays and as a result these people can hardly buy homes. More and more people prefer to live with their relatives. What's more, lots of us are afraid of losing their job.

One more reason is household formation. Frankly speaking such reasons as for example, to save their money more and more people try to stay with their parents or find a roommate. Lower divorce rates also have an impact. It's unlikely that the recession created a lot more marital bliss. What's more, fewer immigrants are looking for homes because of strict immigration politics. And as a result there is no housing demand.

There is one more reason why housing prices won't grow – it's a shadow inventory. Actually, shadow inventory consists of houses that the proprietors feel like selling however they haven't made an announcement yet because they think it's impossible to obtain the price they would like. Lots of agents say that nowadays there are 6, 5 months' worth of home inventory.



As well note that one fourth of mortgage owners are underwater. Sometimes people want to sell their homes but they are not sure they will really get a good replacement to their homes. What's more, they say mortgage default is possible, but frankly speaking, they are just rumors. So, people try to return money for their loans and as a result, lots of people underwater don't hurry to buy new apartment waiting they are made by economics or any difficult situations to leave.

What's more, pay your attention to the fact that there are stricter mortgage demands nowadays because we are in fact have faced with housing crisis because banks were giving mortgages to people who wasn't be able to pay for them. According to the new demands those people who have bought houses for the period of boom won't be able to get a mortgage at this moment.

Actually, now housing prices are in fact very low. Note that the Federal Reserve is maintaining monetary policy free because they want to maintain the revival. And frankly speaking, it's impossible do without end.

Housing