Housing Boom

Investments in housing industry are making Americans wealthier and the investment is so lucrative that it has caused the housing prices to increase dramatically.

The market is showing the sign of heating up with more and more people willing to take the plunge. For many investors their home values have nearly doubled in five years. Annual rate of sales for new house reached 2.2 million in February, which is the highest since the housing industry developed in the 70’s. It is expected that increase in mortgage rates and tighter monetary policy will slow down the housing boom.

The demand for second homes is continuing with the baby boomers while the immigrants are becoming first time buyers. The slow down will have the impact on people, who depend on the 10% increase in value, to pay for their children’s education or fund their retirement. Stronger economy has made the mortgage rates to increase and inflation has also increased. The housing industry in the past has contributed to the growth of real gross domestic products and employment.