The long term outlook for housing demand is good! Several national studies suggest we have already hit bottom.
A new (2008) study from the Joint Center for Housing Studies of Harvard University finds "the country poised to see an increase in housing demand throughout the next decade.
"We still have a growing population," said Nicolas Retsinas, director of the Joint Center for Housing Studies and one of the study's authors. "As long as you have more households, more people are going to need places to live."
Social trends - people getting married later and divorced more often - are making single-person households the fastest growing household type, the study finds. A long-term net increase in potential home buyers will be driven by demographic factors: the aging of "echo boomers" into adulthood, an increased life expectancy for baby boomers* and projected annual immigration of 1.2 million.
From 2010 to 2020, the number of households in the United States will grow by an average of more than 1.4 million per year, the study finds.
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Well the last week has seen several interesting developments in the mortgage world.
Firstly, the Bank of England has slashed the base rate by 1.5%, meaning the base rate is now only 3%.
This should be particularly beneficial for anyone currently on a tracker but is unlikely to have a direct effect on new rates. However many lenders have passed on this cut in the form of a reduction in their Standard Variable Rates.
Secondly, as a result of the base rate cut, the 3 month LIBOR rate has been cut by 1%, now sitting at just below 4.5%.
The LIBOR rate is the rate at which banks lend to each other and will have a direct effect on the costs to the banks of obtaining funds, and therefore enable them to reduce mortgage rates.
As a result of the above, nearly all tracker rates have been withdrawn from the market to be repriced. The next week or so should be interesting as new rates gradually begin to appear again.
But what does this mean to the individual who may be about to remortgage?
Well, two things.
Firstly, the rate that you will revert to when your current deal comes to an end, the lenders Standard Variable Rate(SVR,)will probably be much lower that it would have been a week ago. This may mean that you are better off sitting on the SVR with your current lender rather than moving elsewhere or taking another deal with them.
Secondly, we are due to see a lot of new rates coming out which may well be a lot more competitive than you were expecting. So there could be cheaper options out there.
Also, depending on how rates are repriced, it may be a good time to fix your mortgage rate, although this will depend on your circumstances.
If you are due to come out of your current deal any time soon, speak to an independent [url=http://www.wwfp.net/mortgage/mortgage-broker.html] mortgage broker[/url]. They will be able to tell you what the best deals out there are for your circumstances and tell you whether it is worth you moving at all or, as is now often the case, you are better off staying where you are.
A long term outlook of projected growth is very strong from 2010-2010, Generation Y is going to be a huge group of buyers. This type of buyer is an internet savvy buyer, and being active on the internet is the key to building relationships with this group.
Greg: I would bet that starting sometime next year, housing will correct. After all, it's been down for at least a year in my neck of the woods and longer in other parts of the country. When the buyer returns to the marketplace (I predict second half of 2009), the housing market will head back up.