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American dream for homes may be over

  • Home ownership is a key data showing economic health, as it points at what percentages of people own the place they live in.
  • If the house is not owned the occupant pays a considerable fee, reducing their wallet size. Healthy growth points to overall growing wealth in the economy and reduction in inequality.
  • Last boom of 2003-2007 saw healthy rise of homeownership in US, that fueled the markets for Mortgage backed securities before the market was shattered during the crisis.
  • The rate of home ownership neared 70 percent in 2004 but faltered since then and housing market finally got busted in 2008.
  • Despite improvement in US economy, growth in the housing market is yet to pick up pace. Recent data pointed at that. Moreover FED officials also expressed their concern over the condition.
  • Since rates are already rising in US and Federal Reserve is about start the rate rise starting this year, the housing market is expected to continue to feel the heat.

After the first rate hike is taken care with, it would be vital to watch out the reactions in the housing market and FED is expected to remain cautious over the development.

 

 

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