New Home Mortgage Loans Will Help the Economy
One of the biggest problems that this economy is facing is that there are very few new home mortgage loans being applied for. It seems the interst in the new home market has wanned since the middle of 2007 and has yet to even hope to recover. Not only have new home sales decreased, we are seeing less and less first time buyers into the market. I think we all have younger friends and family who have no desire to own a home, this is not good for the overall economy.
President Obama has worked very hard to spark the interest in first time home buyers. He is offering an $8000 tax credit and the Federal Reserve Bank is working diligently to keep average mortgage rates as low as possible. This is likely bad news for the economy in the long run, but it is great for new home buyers. If interest rates continue to stay low, President Obama is hoping that there is a surge in new home mortgage loans.
The housing market is one of the strong underpinnings of the United States economy. We all saw how quickly the overall economy fell when the housing market took a turn for the worse. Since July of 2006, the housing market has steadily decline. Obviously some months have been worse than others, but overall, each month has been a decline. Since then, consumer sentiment has tanked and almost every part of the economy has taken a large hit.
For three years now, home owners have seen the value of their homes decrease. Many of these home owners have expressed their displeasure with their friends, family and love ones. These individuals are getting to hear just how bad it is to be a home owner. Not only is the value of a home going down, the maintenance to keep up with the home continues to get more strenuous. If you have a full time job, children and a hobby, when is their time to fix up the house?
This is exactly what the younger generation sees and hears and this is why new home mortgage loans are few and far between. If you just graduated from college and are thinking about buying a house, most of the time you will ask your friends and family what they think. When the response is that they have lost 30% of the value in their homes and they have tried to sell the home for two years with no luck, that greatly pushes the younger generation away from buying a new home.
Overall, it is going to take some bottoming out process in the housing market before new home buyers will come onto the scene. It does not matter how low mortgage rates are, until there is price appreciation it is not going to matter. After graduating college, no one wants to buy a hassle that is only going to lose money.
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Lowest Home Loan Rates Out There - What to Look For - Economic Conversation on
Sun, 2nd Aug 2009 7:29 pm
[...] them. This is not the case; it is their job to give you financial numbers when it comes to your mortgage. You are not obligated to sign with any lender you do no deem [...]
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