The Housing Market Effect On The Economy

Each owner has surfed the Internet to get an idea of ??the value of homes in the neighborhood. House prices continue to fall to a drain on the economy. The lowest mortgage rates in history, not a blessing to enjoy big enough for many buyers, the unique combination of historical rates and house prices have been more attractive. How much property that contribute to the economy, is another question. Some experts say as little as 10% and another economist estimates, as much as 20% of business is real estate. The housing has a domino effect on the economy. Lower sales of real estate will eventually lead to lower property prices. This can then reduce the amount of home equity loan the owner to receive what in consumer spending.

Nearly 70% of the economy of the United States is based on personal consumption. The decline in consumer spending contributes to a downward spiral in the global economy. Return recently 2002-2004, the owners have refinanced their mortgages took an astonishing 400 billion U.S. dollars of cash, most of which was injected into the economy. It is no longer a source of most of the original owner and put a damper on additional spending. The only good news in real estate prices down, it is reducing the chances of higher inflation.

It was assumed that turning around the housing is the key to turning around the economy. It is no coincidence that home sales and prices have fallen, so follow-up of the economy. How big of a drag housing has been on the economic recovery? The answer is that housing was a major factor for the slower recovery. When the Real Estate business would be an important stimulus for the economy with lower unemployment rates and add the creation of more jobs through construction.

While the real estate bubble of the mid-2000s, builders spent more than $ 600,000,000,000 a year on earth, materials and salaries. There are many other ways, that has the real estate market, the economy will be increased in the last ten years. The wealth effect that comes to mind when house prices rise, people feel richer. Four years after the recession officially began in December 2007, economists, businesses and consumers have expressed growing optimism about the recovery in recent weeks.

The property market is slowly ticking, mainly at young adults, who with her parents, who lived in their own homes surrounded by strong employment growth in travel. The inventory of new homes have reached a record high, at some point, we ramp the construction of houses in a big way. After adding nothing to the economic growth in the last six years, the expectations of housing finally make a significant contribution to the global economy in 2012.

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