12 Reasons Why The U.S. Housing Crash Is Far From Over
Over the past several months, many in the mainstream media have hailed the slight improvement in the U.S. real estate market as a “housing recovery”. But the truth is that the small improvement in the numbers was primarily due to a significant number of Americans attempting to squeeze their home purchases in before the huge home buyer tax credit expired at the end of April. Now that there is no more giant tax incentive, real estate professionals all over the United States are fearing the worst. Mortgage defaults and foreclosures are still at record levels, and a giant “second wave” of adjustable rate mortgages is scheduled to reset in 2011 and 2012. In addition, there are numerous indications that the U.S. economy as a whole is going to experience a dramatic downturn shortly, and if that happens it is going to be really bad news for the housing industry. So are we about to see “Housing Crash Part 2”?
The reality is that it has taken unprecedented U.S. government intervention to even stabilize the U.S. housing market. Now that the tax credit has expired, and as the U.S. economy continues to worsen, there is simply no way (except if we see hyperinflation at some point) that housing prices are going to return to the levels that we saw during the height of the housing bubble.
Banks and other lending institutions all across the U.S. have seriously tightened their lending standards and so it is now much more difficult to get approved for a mortgage. That means that there are going to be less home buyers in the marketplace.
In addition, while mortgage rates are at record lows right now, the truth is that they will not stay there indefinitely. When interest rates do start to rise that is going to suck even more home buyers out of the market.
Truthfully, the housing market is not going to be as good as it was during the first several months of 2010 for quite some time. The entire U.S. economy is on the verge of collapse, and when it does the real estate industry is going to be one of the first to feel the pain.
The following are 12 reasons why the U.S. housing crash is far from over….