U.S. Real estate finds a bottom: The results are in
Today's Financial News - Posted October 8, 2008
There is good news in the real estate industry. Pending sales are on the rise and mortgage rates are declining. It is just what we need to get the market growing once again.
By Andrew Snyder
Baltimore – (TFN): The Federal Reserve’s decision to cut critical short-term interest rates is just what the nation’s real estate industry was praying for. Already low interest rates are about to go even lower.
With news that nearly 20% of all American homeowners are underwater scaring the pants of many potential buyers, dropping interest rates could be the ploy that just might draw buyers back to the market. After all, the opportunity to save thousands of dollars annually on interest payments is a fantastic opportunity.
While the news of ever-rising foreclosures and plunging home prices makes sellers nervous, it is starting to get the attention of value hunters. In fact, a surprising amount of buyers are already entering the market.
In a report released earlier today, the National Association of Realtors announced its pending home sales index unexpectedly rose in August. Experts were anticipating a drop of 1.8%. In reality, the number of pending sales rose by 7.4%, to a level not seen in over a year.
Does this mark the bottom of the nation’s real estate market?
While not every market will level off, the majority of American homes will see their valuations stop falling. With mortgages selling at a discount and homes going for prices we have not seen in over a decade, buyers will begin to flood the market.
We still have a glut of unsold homes on the market, so do not expect a surge in prices anytime soon. But you can be reasonably assured prices will not drop drastically further in almost all American markets.
It is one piece of good news in an economy that has many folks running scared.
Next Article: Hershey (HSY): Kisses sweeten the recession
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