Categorized | Residential

Latest Report Shows Signs of Recovery

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The latest residential real estate report from Freddie Mac indicates that the United States housing market may, in fact, be starting to make its long awaited recovery. While full recovery certainly isn’t imminent, all the pieces are present for a consistent gradual recovery.

 

One of the biggest factors influencing the overall outlook on the residential real estate market is that there are finally strong signs of true economic growth. As such, many neighborhoods around the United States that have struggled over the past five years may soon start to show increased demand and rising home prices.

 

As the economy gains strength, the unemployment rate will decline, and consumer confidence will improve. Those favorable conditions will prompt potential homeowners to enter the market for the first time after a long hiatus following the crash.

 

With demand expected to increase, the rate for thirty-year fixed mortgages may finally start to increase again for those taking out new loans. While current rates continue to hover below four percent, economists at Freddie Mac believe that the rate will rise to roughly four and a half percent by the end of the year.

 

Although the single-family housing market is finally showing signs of true recovery, the rental market is still gaining strength. In fact, new rental construction is expected to peak in 2012, hitting its highest level since 2005.

 

Even as home prices fall over the next few months, economists are extremely optimistic about the prospects of the housing market. Declining inventory levels and increased demand will eventually play a role in bringing home values back up to adequate levels.

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About James Pattric

James writes for the Residential category (along with Josh Johnson) and also heads up the Resources category.

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