Is the Housing Recovery Real?

Everyone is talking about the housing recovery, but is it for real this time or are people just being overly optimistic? This time all signs point to the fact that the industry is improving, at least right now. At this point, it seems as if the market is definitely in an upward swing and is trying to continue to make its way back to where it once was. What experts are basing the “recovery” on is that the numbers are not as bad as they were this time last year, which is an improvement. What are the signs that these experts see?

Fewer Foreclosures

One of the largest signs of a declining housing market was the large number of foreclosures that occurred each year. In 2009, almost half of the homes that were sold were foreclosures or short sales. In the beginning of 2013, that number dropped to just 21 percent of home sales. That is a drastic change that has made experts believe that the housing market is coming back, slowly but surely. This by no means says that foreclosures are done and gone, but the fact that the total number is decreasing is promising for the market as a whole, making it possible to believe that the market is coming back.

Rising Mortgage Rates

Rising mortgage rates actually play a role in the housing recovery, even though it would seem that it should be the opposite. While the most recent mortgage rates have seen a hike, they could actually push more potential buyers into the market. The recently rapidly dropping rates had many borrowers or potential buyers waiting for the rates to go even lower. They thought if they just held out a little longer that they could get an even better rate than was currently available. Now that the rates are slowly, but steadily increasing, more buyers are jumping in head first before the rates soar too high. This is yet another factor that is helping to fuel the housing recovery as more people begin to buy homes.

What about those people that are looking for loans with bad credit? They are not out of luck. There are still many lenders that are willing to lend to these borrowers, whether they had a recent bankruptcy or simply have blemished credit. While it is most beneficial for borrowers to wait until their credit has cleared, which in the case of a bankruptcy is 4 years, many borrowers are finding it possible to obtain a loan at a higher rate, allowing them to enter the housing market too. It is also becoming increasingly possible for existing homeowners to refinance their mortgage with bad credit.

Lower Unemployment Rates

As the economy continues to improve, so do the unemployment rates. As more people become employed, their debt ratios will decrease and their credit scores will increase. This makes it possible for more people to purchase new homes or existing homes. While the unemployment rate is not decreasing at as fast of a rate as many would like, the fact that it is decreasing is sign enough that the housing recovery is for real and that more people are looking for a new place to call home.

Is there any way to undoubtedly tell that the housing recovery is for real? Only time will tell. At the moment, however, all signs point tothe fact that it is. Whether it is the lesser amount of foreclosures that are being sold, the higher mortgage rates that are causing people to buy houses now or the lower unemployment rates that are opening up more opportunities, the housing industry is showing signs of improvement. Hopefully the trend continues to go upwards and the entire industry can see the success that it once had before the great housing decline began.

Amy Johnson is an active blogger who is fond of writing articles on Bad Credit Loans to encourage people to manage and protect their credit. Follow her on Twitter to know more about housing recovery.