While certain real estate markets in the US have completely recovered from their post-2008 crash levels, a lot more regions are still waiting for their own recovery. Well, if the two week trend of sinking mortgage rates continue, help is on the way. Moreover, if the US jobs market continues to improve, the overall US real estate market might be poised for a significant across-the-board improvement.
Never underestimate the power of low mortgage rates
Low mortgage rates are key to making housing affordable to would be home buyers. Considering the continued decline of mortgage rates, more and more Americans are pulling the trigger and finally buying that first home or trading up. Low mortgage rates enable a higher degree of market ‘churn’ which can directly help boost overall home prices in a given real estate market. Fixed rate mortgages are hovering around just below 3 percent. This marks a 20 month low in fixed rate 15 year mortgages.
Factoring in the continuous improvement in the overall US jobs picture, it is no surprise that new home construction is up more than 4% according to recently released housing figures. Assuming there are no harsh surprises, as far as interest rates are concerned, expect the US housing market to continue to heat up. Another key factor to consider is the amount of wealth being generated by the easy liquidity-driven equities market lately. A decent chunk of that wealth is sure to seep into the larger real estate market. Taken all together, the overall housing picture looks quite sunny in the US for 2015.
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