The U.S. housing market has shown notable stability in 2011 compared to the previous two years when the tax credit made a clear impact. Although recent economic indicators have been less than expected, including a downward revision of GDP and consumer confidence that mirrors early 2009, owning a home is still valued by the majority of Americans. 72% of renters say owning is a top priority for their future, up from 68% a year earlier.
However, most aspiring homeowners are held back by two main factors: funds for a down payment (82%) and confidence in their job security (80%). Federal Reserve Chair Ben Bernanke emphasized the importance of a healthy housing market to a robust recovery. He stressed the adverse effects of tighter credit conditions for borrowers, urging Congress to take tax and policy measures to help stabilize the market. He also noted the significance of addressing long-term fiscal policies including debt levels, upcoming expenses to support an aging population, and taxes.
Buyers continue to benefit from historically favorable buying conditions, and sellers are encouraged by increased market stability. Although the Fed made a commitment to keep its interest rate at the current level until mid-2013, mortgage rates can, and often do, still fluctuate. In the midst of these reports, it is important to keep in mind the path to recovery was always expected to be a long and uneven road. As we progress toward a stronger recovery, economic improvement typically spurs rising interest rates in order to keep inflation in line.
Home Updating:
As the weather gets cooler, some homeowners could be considering undertaking home renovations or updates before the holiday season. Here are a few findings about updates and home sales:
~ Homeowners typically spend considerably more on updates to their home when planning to live in and enjoy it, with an average of nearly $9,000.
~ In contrast, they only spend an average of $3,400 when making updates in preparation to sell.
~ The most common updates sellers performed before listing were paint, flooring, and light fixtures.
~ Although the majority of buyers were least likely to compromise on the location, 16% were least likely to compromise on updates.
~ 75% of homes sold were either fairly updated or very updated.
~ Sellers began repairing their home 1 to 8 weeks in advance of listing.
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