U.S. housing sees much-needed slowdown

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After experiencing a massive crash and a vigorous recovery, the U.S. housing market is entering a new phase of slower but steady gains.

The market is cooling somewhat as would-be buyers digest the impact of higher mortgage rates and the economy fails to generate robust increases in wages for workers.

Yet many economists welcome the slowdown as evidence that the housing sector is entering a “Goldilocks” phase – not too hot and not too cold – after the torrid gains witnessed last year.

“We should be positively encouraged,” said Paul Diggle, a real estate economist at Capital Economics. “The price increases we were seeing looked quite unsustainable and potentially unhealthy.”

If prices had continued to rise at recent rates, he said, the market would have returned to bubble territory in about 18 months. More modest gains will “hopefully avoid that countrywide overvaluation, which would be planting the seeds for the next boom-bust cycle.” Over all, U.S. housing prices remain roughly 18 per cent below the peak they touched in 2006.

Other economists also saw positive signs in Tuesday’s data. Moderate price increases mean that “homeowners continue to build equity, but home purchases remain within the realm of possibility for buyers,” wrote Patrick Newport and Stephanie Karol of IHS Global Insight.

There are indications that the housing market is bouncing back from the recent battering it took over a harsh winter. Sales of new homes jumped in May to a level not seen in six years, rising 18 per cent over the previous month, the U.S. Commerce Department said Tuesday. Sales of existing homes increased 4.9 per cent in May to the highest rate since October, 2013, the National Association of Realtors said on Monday.

Still, few experts would say the housing market has repaired all the damage it sustained in the crash. “Housing is not back to normal,” said David Blitzer of S&P Dow Jones Indices in a statement on Tuesday. “First time home buyers are not back in force, and qualifying for a mortgage remains challenging.”

Some investors have suggested that there is a generational change under way in the U.S. in how people approach the housing market, arguing that younger people may never feel the allure of owning a home the way their parents did. If such predictions turn out to be true, it would be a long-term drag on the sector for years to come.

What appears to be clear is that the sprinting phase of the housing recovery is over, replaced by a longer, slower race. Earlier, price increases were driven by ultra-low mortgage rates and speculative buying by investors. Now the progress of the housing market will depend on how many jobs the economy creates and whether incomes are rising.

Housing remains broadly affordable. The interest rate on a fixed-rate 30-year mortgage now stands at 4.17 per cent, up from 3.93 per cent a year earlier, but still low by historical standards.

Home prices, meanwhile, are about 3 per cent below fair value, judging by their long-term relationship with personal income and rental rates, according to a report Tuesday from real-estate firm Trulia (by comparison, prices were 39 per cent overvalued at the height of the housing boom).

Of the 100 largest cities in the U.S., home prices remain undervalued in 76 of them, said Trulia. On the other end of the spectrum, eight of the 10 most overvalued housing markets are in California. Yet even those cities are nowhere near the kind of frothiness they demonstrated at the top of the housing market back in 2006, wrote Jed Kolko, Trulia’s chief economist.

A closely-watched index of housing prices released Tuesday showed that price increases decelerated across the country in April. Housing prices in 20 major cities rose 10.8 per cent over a year earlier, down from a 12.4-per-cent pace in March, according to figures from S&P Dow Jones Indices.

Implement These Tips To Raise Your Credit Score

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During tough economic times, many people have problems paying their bills on time. Often they end up with credit problems. Fortunately, there are things a person can do to start a credit repair process. Start out by reading the steps in this article to learn the best ways to easily repair your credit.

If you have credit cards with a utilization level over 50%, then pay them down until they are below 50% utilization. Once your balance reaches 50%, your rating starts to really dip. At that point, it is ideal to pay off your cards altogether, but if not, try to spread out the debt.

The key to successful repair of your credit is to know your rights about how your accounts are reported. If you feel that errors have been made in the way an agency has reported to your credit history then it is in your best interest to know your rights and contact these creditors with that information in your toolbox.

To fix bad credit, restrict yourself from borrowing any more money. Ask yourself if you can really afford what you want to buy, and if you really need it. By reducing your unnecessary expenses on a daily basis, you should be able to set enough money aside to pay back your creditors.

When you decide you want to repair your credit, sending out disputes can help take false information off of your reports. If there are several items on your credit report you need to dispute, only do one at a time. Wait a little while before you send the next one. If you send too many at one time the credit bureau may become suspicious and consider your disputes frivolous.

As previously stated, credit problems are a pretty common problem faced by people. Since so many people have had credit problems in the past, there are many proven ways to improve a person's credit rating. Use the great information in this article to begin repairing your credit, quickly and easily.

Tips To Help You Buy Real Estate With Confidence

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Keeping an open mind when purchasing real estate is always good advice. There is also lots of other great advice and suggestions to follow that will keep you ahead of the pack when it comes to your real estate purchases, either now or in the future. Keep reading if you want to keep learning.

When you are looking into real estate, understand that this could be your home for a long time. Take a family, for example. Although you might not have children yet, that doesn't mean that you won't want to start a family in the future. This means you should be focusing on a home's size, the school district, neighborhood safety, and other important factors of raising a family.

Chose a real estate agent that is dedicated to working for you. A good Realtor should be available before, during and after a sale. Ask the Realtor for references before making a decision. This person will be your eyes and ears in this process so make sure they are someone you can trust to stick with you.

To save money when buying real estate you should look for an existing house. New construction is down but the builder still needs to make a profit which will limit how much they can negotiate the price. Someone reselling a home may have much more room to dicker.

One important tip when it comes to real estate is to be sure to investigate the school district that the home falls within if you have kids or plan on having them. This is important because the quality of school districts may vary greatly from town to town. This may not seem important if you do not have kids yet, but will be extremely important to your peace of mind and your child's education.

It's time to take this information and put it to good use. A home or an investment property are very important decisions and purchases. You have a solid foundation of understanding that will help guide you so that you can make good buys and ultimately, a good investment, as well.