Filed Under Buying · Tagged: Financing, National Association of Realtor · Print This Article
The word “recession” is now being used by American economists, and a recent CNN poll found that more than half of Americans believe we are in a recession now.
A recession, however, is no time to lose hope. Lawrence Yun, National Association of Realtor’s chief economist, is assuring sellers that existing home sales will be rising despite tough economic times.
The reason? Affordability. Home prices are falling and mortgage rates are still near historic lows. There are currently 93% employed households who may be looking to enter the home market and take advantage of the lower prices. Also available are the assistance programs mentioned in earlier blog posts for first-time buyers, such as the $7500 tax credit/loan.
In the previous recession, home sales rose from 5.2 million to 6.2 million despite jobs being cut.
Economic advisor Ryan Detrick says “The positive is we need to have this correction. It is all part of the cycle. It’s the hard part that no one likes, but it is necessary. We need to flush out the excesses from the recent housing boom. Bubbles are a part of life. And unfortunately, so are crashes.”
Detrick also points out that the government rescue package could produce unexpected results. But the fact that the U.S. government, and those around the world, acted quickly is a positive.
“If we want to have a stronger country and global economy down the road… we have to suffer now to get stronger later. The government doesn’t like the word recession, but after the eight we’ve seen since the end of WWII – the US has been stronger coming out each time.”
If you’re ready to enter the home market, you will need a GOOD LENDER and a GOOD REALTOR, and you may need a larger down payment than you would have needed two years ago.
NAR’S Yun says, “The two housing stimulus bills (home buyer tax credit and higher loan limits), $700 billion Treasury plan and the Federal Reserve”s actions are designed to assure steady mortgage flow and help revive the housing sector. With it, the economy will expand and create jobs. America and its exceptional ingenuity always find a way to move past crises and back to economic prosperity.”
Business week finds people optimistic about economic future.
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