However, it seems the home prices in the U.S. are also making its way back up. The reports from October have just recently come out (with some huge delay) and it shows 4.8% increase rather than the 4.0% that was predicted by market analysts. And it doesn't seem that number is going to let up anytime soon. With the mortgage rates very low, people will continuously buy/refinance their property. With people able to hold on to their houses, the prices of houses will only go up from here.
But how long can this really keep up? People are willing to buy houses because the house prices are low by the "slowing economy." The mortgage rate is going down as well because of the "slowing economy." As soon as people realize that the economy is "slowing," the prices of houses will go up. Also, with no real tax deal coming through for the new year, we can expect some kind of raise on housing taxes. Is the housing market actually in a real rebound? Or is it some effects because of a slow economy?
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I personally believe, and hope, that the housing market has been rebounding, if only somewhat, since the "big market crash" of 2008. Whether it continues or not remains to be seen. Bruce brings up some good factors that will influence the rebound path. As the Republicans and Democrats are scrambling in Congress over the fiscal cliff, it seems less and less likely that a deal will be made that will affect the housing market. However, again, this remains to be seen.
As of right now, the economy does seem somewhat slow. For example, a recent report said that Christmas sales were below expectations and it seemed to portray a dismal US economy.
If house prices do go up, people will be less likely to buy homes and the economy will get "slower," as Bruce puts it. But since house prices are slowly trickling back up, we should hope that it will stay this way.
The Washington Post had an article about this rise in the house market and even stated that the "crash was over." Well it is good to be optimistic, I do feel we should be wary because the economy has not yet completely recovered from the 2008 crash. Even the article quickly mentioned that it was unlikely that the economy would return to the "boom" of the past.
Anyway, if house prices do go up as Bruce predicts, I hope it will not prevent us from enjoying our winter break. Hope everyone is doing well!
One of the key aspects in this "rebound" is home-owner morale. According to this article, a National Housing Survey conducted by Fannie Mae in September 2012 concluded that only a mere 11% believed that their home values would decline. Though it obviously does not constitute the entirety of the problem, a positive outlook can encourage more Americans to invest in homes (buying them or building them) and, thus, boost the house market. As the aforementioned article says, more houses means more construction jobs as well as more jobs for specialists such as electricians. Experts warn that a rebound may not be as close as we think, but perhaps home-owner/buyer optimism will prove experts wrong.
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