For decades, investment in real estate has always been one of the key areas of benefits for banks and other financial institutions. Investing in a house was always considered one of the surest ways to safeguard money.
The recession that the nation has faced in recent years is the worst since the Great Depression. It has hit people in almost all areas of life and affected almost every sector of the economy. However, recently there have been indications that the worst is over. Stock markets are improving, home sales appear to be recovering, and affordability is at an all-time high. Looking back, there have been some amazing examples of the long-term impact of the recession.
The housing market in distress is especially worrisome since housing is not just another sector of the economy, but generally affects the banking industry and other sectors of the economy. The unemployment rate has already increased beyond the projections of the worst scenario within the bank stress test. Unemployment has a direct impact on the housing sector. Many of those who lose their jobs finally stop paying their loans, losing their homes, which of course costs the banks money.
The housing sector, in general, is harder to foresee than the stock market. The real estate data does not go back to the Dow Jones data. Sometimes, however, stocks and real estate go hand in hand, allowing for a fairly accurate forecast. The last time a housing collapse was followed by a significant stock market crash was at the start of the Great Depression.
Today the housing market faces a multitude of challenges. The bleak economic situation in the US UU., The rising rates of unemployment and the collapse of housing prices have paved the way to an uncertain future in which the road to recovery will certainly be very long and tedious. It would probably take a considerable time to recover the housing market and restore property values to normal. As the real estate experts interpret that buying a house at this current juncture is not a good idea, especially on the coasts. Housing experts believe it is absolutely inadvisable to buy a house now as prices would plummet further. As the trends suggest that in the near future housing prices will collapse even more as housing prices have not reached their minimum. Potential buyers should not invest their savings in the purchase of a house but should have savings on hand and invest when prices have reached their minimum.