A lot of people are skeptical right now as to whether the real estate market will ever pull out of its slump. Currently sales are rising in some areas, but prices remain pretty low, partly because of the high rate of foreclosures and short sales.
But in my opinion, there are signs that the housing market is headed for recovery. Personally, I think the increase in sales is a very good sign. Since fewer homes are being listed, the increase in sales means that we’re eating through the current inventory much faster now. Once the surplus of homes for sale is gone, theoretically prices should rise (since being harder to get makes a thing more valuable).
Another thing that I think is helping is the fact that mortgage rates have stayed low. The low prices and low rates have inspired a lot of buyers to take advantage of the current economy and score themselves a good deal on a home or an investment property. Therefore, the low rates are helping to reduce the current inventory.
Of course, one thing that (on the surface) appears not to be helping is that many lenders are being much more particular about who they lend to. This keeps homes from being purchased, one might argue. This might be true, but it also helps prevent future crises like the one we’re in, by preventing people from becoming homeowners if they can’t really afford a house.
No matter what you might say about the mortgage industry — whether they are helping or hurting the speed of our economic recovery — the truth is that it is much safer to get a home loan now than it used to be. Loan officer training is becoming standardized and regulated now, with greater transparency in the business to ensure that homebuyers don’t get taken advantage of. NMLS education is followed up with a required licensing exam that qualifies mortgage brokers to work in the industry.
A lot of people point to current conditions when they claim that the housing market just isn’t going to recover. But I say be patient. Just as reform takes time, so does economic recovery of this magnitude.