2012 Revives Housing Markets as Mortgage Rates Drop
As the US economy peps-up for renaissance in 2012, immigrants may relish own property.
New Year’s Gift – The United States economy is all set to undergo a renaissance as its citizens are gifted the interest rate drop at the start of 2012. The average rate for a 30-year fixed loan fell to 3.91%. This is the lowest data recorded since 1971 (3.94%). The United States housing market is finally showing signs of recovery after rigid lending norms and depressing foreclosure values. The stock of unsold properties plunged to its lowest level in six years as reported by the national association of Realtor.
Rising Affordability –
The already low interest rates coupled with decreasing home prices are raising the household affordability, said an esteemed united states economist. He further added that job growth and consumer confidence would also help the housing market to get a kick.
Home-sales recorded in November revealed a 4% increase as compared with the month before. Mortgage bankers association recorded a decline in home loan applications for the week ended December 16.
Immigrants – Immigrants could emerge as the prime beneficiaries of this rate cut. Earlier in October, it was considered that senate would let immigrants who spend at least $500,000 in cash on home to get a visa. Half of it must compulsorily be used on primary residence while the remainder could be used on investment properties. This visa would solely be for residence, and a work permit is compulsory to attain by standard channels.
Past Plight – Evidently, the housing market has always been one of the most hard done by. In-shadow inventory as well as the on-the-market inventory shortage along with falling demand for homes resulted in a substantial decline in home prices since the previous housing bubble 4 years ago. Currently, home prices are down by 33% since the peak of the market. Apart from that, there were a lot of other unfavorable market conditions. It was projected that disparity in supply and demand would result in price decline, which eventually happened.
Overseas Buyers – For the financial year 2010-2011, overseas buyers shared a staggering $82 billion in real-estate sales (residential) of the country. The year before that accounted for $66 billion (this data was released by the national association of realtors). Of all house sales, foreign buyers accounted for 5.5% in Miami and 4.3% in phoenix for the period of July 2011. In the last 6 years, the number of households formed has dropped below a million, which is fairly due to the declining immigration.