US housing market recovery fuelled by investors

  • 12 years ago
  • Uncategorized

Recent figures have shown an
improvement in the US housing market. Property prices are up and the number of
existing homes for sale is falling. However, a leading news source has reported
that the continued upturn in the country’s housing market is as a result of
investors rather than residential buyers.

CBS News reports that ‘if the
housing upswing does continue, it will likely because of the trend’s unique
characteristics, with investors, more than consumers, sustaining momentum.’

Investors turning to property to maximise returns

Over recent months there has been
plenty of positive news about the US property market. Fiserv has reported that
average US house prices has increased 1.2 percent since summer 2011 while
property prices rose in over half of the 384 metro area markets in the second
quarter of 2012.

“Yes, the housing market is
in a recovery,” says Rick Sharga, executive vice president of Carrington
Mortgage Holdings, a loan servicing firm. “All the metrics are pointing in
the right direction – pending sales, sales of new and existing homes, price
appreciation, and housing starts. Delinquency and foreclosure rates are both
trending down. But it’s not an explosive, booming recovery. It’s a recovery in
the sense that it’s better than the horrible numbers we’ve seen over the past
few years.”

CBS News reports that ‘what makes
the upturn in housing unusual is that it is mostly being fueled not by
consumers buying a first or even a second home, but by investors scooping up
distressed properties.’

Investors are struggling to get a
decent return on traditional investments such as bonds and savings accounts.
So, they are increasingly turning to the property market in order to benefit
from rising capital values and rents.”

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