Why We Are Not Entering A Housing Bubble
Chicago, IL (PRWEB) July 28, 2013 -- When prospective clients walk into The Federal Savings Bank, an institution specialized in veteran loans, they sometimes have fears that buying a home in the current market dangerous as a bubble may be forming. While new home sales have climbed 38% since last year with the June figure at five year highs, the bank continues to urge individuals to apply for a mortgage now.
"When we speak to prospects who fear a housing bubble, the first thing we tell them is that they need to apply for a loan. Applying for a mortgage lets the applicant know if they can even afford a home, and if so, at what price," says Nick a bank at The Federal Savings Bank. "Then, if the applicant can afford a home we tell them prices remain relatively cheap compared to 2006 levels." Indeed, the Case Shiller National Home Price Index remains 25% below its March 2006 level implying there's still more room for housing prices to climb.
Jed Kolko, chief economist at Trulia seems to agree that that price growth remains possible. "We estimate that national home prices are 7% undervalued in the second quarter of 2013."
According to Forbes, two companies that collect data on the Real Estate market, CoreLogic, and Altos Research, expect home values to post a positive rise by the end of 2013. With credit standards decline with declining unemployment and rising wages, we should see more Americans applying for home pushing up property values.
Though rising interest rates will curb some demand for mortgages and thus home sales, housing inventory remains tight, holding demand up. If anything, rising mortgage rates will prevent a housing bubble from forming. In fact, the Fed Chariman Ben Bernanke showed on concern on July 17th over rising mortgage rates in the future. This concern coming from the highest authority in the Federal Reserve gave a serious implication of rising rates to come hence curb demand for homes soon.
Regardless of the mortgage rates, The Federal Savings bank encourages all individuals to at least apply for a mortgage to learn how much home they can afford. From this point, one can filter his or her search or a property and focus on other characteristics of a home that are important besides price and monthly payment. To get started on a home loan application, please visit: TheFederalSavingsBank.com
The Perfect Mortgage Experience, The Federal Savings Bank, https://www.thefederalsavingsbank.com, 855-686-3883, [email protected]
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