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Is Recovery Imminent in 2012?

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Housing Market Recovery


All the signs point towards a real estate recovery in 2012. Home prices have fallen by historical percentages (investment property prices have fallen as well, albeit to a much lesser degree).

With the demand for rentals shooting up, it is almost as expensive to rent as to buy. And borrowing rates are touching record lows. The building industry is stirring awake with numbers for both single-family homes and permits displaying a positive trend in 2011.

That said, experts caution against getting too excited too soon. While they agree the market is showing positive indicators, they are worried that there are too many artificial factors weighing down prices and that the real estate market itself is not ready to bottom out yet. They also warn that interest rates cannot stay this low into perpetuity! The Federal Reserve has maintained the key rate at almost zero these last three

years, and has promised to continue to maintain this rate for the coming three years. However, whenever the rates start to increase, they might well spell disaster for the housing market as mortgage rates may get too high for anyone to be able to afford buying a home.

What I’ve provided here is a taste of what is going on – if you need more information, continue reading the economists’ view on the current housing situation by clicking here.

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