Has the U.S. housing market reached a “bottom” yet? Are home prices going to start recovering? Is the housing crisis going to end at some point? Today there are millions of American families that would like to buy homes but they are not sure what to do.
After all, nobody wants to end up like all the suckers that bought at the top of the market and now owe far more on their mortgages then their homes are worth. A lot of people are really afraid to take out home loans right now. So should you buy a home in 2011? That is a very good question. The reality is that there are a lot of reasons why home prices could continue to fall.
Unemployment is still rampant, and American families simply cannot afford to buy homes without good jobs. Also, lending institutions have really, really tightened lending standards. That is really restricting the number of buyers in the marketplace.
The number of foreclosures set another record high last year so there are a ton of homes that need to be sold and not a lot of demand for them. So with all of these factors working against the real estate market, are there any reasons why anyone would actually want to buy a home in 2011?
Well, yes there are. The truth is that all of the reckless money printing that the Federal Reserve has been doing and all of the insane borrowing that the U.S. government has been doing have flooded our financial system with new dollars. At some point all of these new dollars are going to cause a tremendous amount of inflation.
Right now we are seeing the price of gas go up and the price of food go up, but eventually the price of everything (including housing) will go up.
When the U.S. economy totally collapses, you are going to want to have your housing expenses locked in. In a highly inflationary environment you may find that your wages do not keep up with inflation and at some point you may be unable to afford to buy any kind of a decent house at all. If you are renting, you may have to deal with rent increase after rent increase.
The best way to avoid housing inflation when it comes will be to own your own home and have a mortgage with a fixed interest rate. But the timing is key. You don’t want to buy that home too early and you don’t want to buy that home too late.
So when will the exact “right” time be?
That is very hard to say.
However, to give us all some numbers to think about, the following are 29 absolutely crazy statistics about the housing crisis that show just how nightmarish the U.S. housing market is right now….
During the first three months of this year, fewer new homes were sold in the U.S. than in any three month period ever
Home prices just keep falling month after month — the Standard & Poor’s/Case-Shiller 20-city index has fallen for seven months in a row
Source: USA Today
U.S. home prices have now declined 32% from the peak of the housing bubble
Source: CNN Money
See the rest of the story at Business Insider