There are two things due to which home building decline continue. The first one is that to borrow money right now since everyone is experiencing an economic crisis. The second one is that what a group of people are earning right now is not sufficient for them to buy a new home.
The reader might be pondering about if then bank is able to give a loan. Although this can happen, it is still not a fine idea because mortgages have been quite high in the past few years. In reality this is one of the reasons why this country is in such a financial disorder.
Most of the people borrow money and in the end are not able to pay the interest. Due to that, there have been immense foreclosures and the government has stepped in to try and solve the problem with a $700 billion bailout plan.
Really, the bailout plan is planned to overpay banks for bad mortgages but the question arises whether this would work or not. Some of the analysts say no to this because the rollercoaster ride seen on Wall Street has nothing to do with the housing prices. In reality some politicians who were not in support of the bailout plan argue that the government should never have stepped in the first place because this is a free market economy.
Since this was done, the American tax payer are forced, the truthful and good ones to give their hard earned money to people and companies who made this trouble happen in the first place.
The banks who happily loaned money to homeowners sold this to companies or to buyers of mortgage backed bonds. This in fact made the matter even worse. Consequently, the price of most homes is now declining so there is a hard time for making a profit if the owner decides to sell his home.
The gloomy actuality out of all of this is that this is not anticipated to stabilize any time soon. In fact, the price of most homes will keep on dropping for 5 years or even more which bring us back to the conclusion that it is better to rent than to build a home.
As a matter of fact to cite one example yearly rents in for homes especially around the coastal areas are three percent less than their real purchase value. Really, the mortgage rates are much higher so it is really not worth to buy or even build a house.
But in reality this may not be the same in other states as some property values and lots have already fallen into line with what people are actually earning so the owner should ensure whether he can manage to pay for to build a house in the given site.
The second reason for the decline in home building, as already mentioned, is that people are not earning adequate to buy a home. This in fact is correct for latest families especially those who have children because it’s firm to do both when the owner already have children.
In this case the right thing which the people must do as home building decline continues is simply to ride it out and then the owner must see what happens in the next three to five years.