With journalists looking for any indication that the recession is over, or any indication it is getting worse, the fall home start numbers are a great chance for some opportunistic reporting. As with every fall, the October new homes starts declined from their summer highs, due to people choosing to stay put for the holidays among a few other factors. With things finally heading in the right direction the media seems to be suffering from a bit of “Chicken Little Syndrome” with an overly negative reporting of the home start numbers.
The government has done what they do to stimulate the housing market, which was first to establish a home buyer tax credit, then to extend it to continue to stimulate the housing market. This did lift the housing market out of the slide it was in and actually allowed for seven percent appreciation across the nation.
With the federal lending corporations Fanny Mae and Freddy Mac reclassifying much of the nation as “appreciating” markets this fall, new lending avenues will open up to home buyers. What this does it allows Primary Mortgage Insurance for lenders, so they will now lend up to one hundred percent loan to value financing again. Prior to this change they were only lending at ninety percent loan to value meaning that buyers would have to come up with ten percent from their own sources.
Among many people, one hundred percent financing is not a very popular idea due to the lack of commitment financially from the home buyer, but it may take this type of financing to stimulate the real estate market, at least temporarily. The widely accepted belief that people should save up 20% of the purchase price for the down payment has been the exception and not the norm for a few decades now, but is still the ideal.
Without a return to responsible saving practices with the average citizen the national housing market will continue to suffer from these periods of volatility. With the last round of tax credits expect to see housing starts back up this spring and the possibility of another high single digit period of appreciation as the recovery is on the way, as slow as the journey may be.
Without stability in the housing market many out of work construction workers will simply not be able to find work, even in the short term.
The author enjoys writing articles on boise real estate & boise homes for sale. For more information click on the links above! Visit the Uber Article Directory to get a totally unique version of this article for reprint.
No comments yet.