Housing Markets And The Housing Crisis

804 Words4 Pages
Seven years removed from recession, American homeowners are beginning to rebound from the hold created by the housing crisis. Throughout history, the housing market has been a key indicator of financial stability and the real economy. Housing booms and bust are often reflections on the mortgage market, labor mobility and consumer spending. With interest rates near zero, at the moment, the real estate market has experienced a steady rise in new and existing home sales, prices and mortgages. Likewise, developments in the U.S. housing market have been instrumental to gains in home improvement spending. In 2015, home improvement retailers, Lowe’s and Home Depot have delivered better than expected results thanks to the housing market recovery. Despite what may seem like a modest recovery, there remains significant concerns that the recovery will be short lived. Some evidence would suggest that interest rates, a flood of foreign investments, income inequality and the same culprits from 2008 are re-inflating a housing bubble. Mortgage Rates By the end of 2015, The Federal Reserve will raise interests and continue to do so throughout the following years. Simply put, interest rates have a direct impact on borrowing costs and by increasing interest rates; mortgage rates can jump as well. Long term mortgage rates are guided by numerous factors including the Fed’s short term rates, household savings rate, the budget deficit, and other indicators of the real economy. At the moment,
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