Housing Market Made Better because of the Approved Senate Bill

14 January, 2013 (16:19) | News | By: Keith and Mary Williams

On January 1st, 2013 the U.S. House of Representatives approved a bill to avoid the fiscal cliff and make the current housing market more stable. Congress extended the tax relief on mortgage debt forgiveness for an additional year and left the mortgage interest deduction rate alone.  The fiscal cliff is a term to describe the economic consequences the United States will face if certain provisions aren’t made by congress.

To help prevent a disaster scenario, the government helped by holding the federal funds rate target at zero and created programs to help home owners reduce their monthly mortgage payments to more sustainable levels.  The latest loan modification will also help homeowners to refinance when home values go up. Mortgage defaults in conjunction with home closings; this will help to strengthen the housing market to hopefully make a rebound. Consistent low interest rates should also encourage people to buy more.

While some areas are recovering quicker than others the market as a whole seems to be improving. Housing prices seem more appealing in many large housing markets, and prices are being driven down by an increase in property listings. With the mix of high, low-end homes selling lower and higher than they were over a year ago it should directly effect to our economy by generating more income from the sale of the higher-priced homes. Larger commissions, higher mortgage interest payments, higher lender fees and other higher expenditures on higher priced homes should all help to generate more income.

Demand for housing should also be improved by cheap borrowing costs. Low averages on 30-year fixed rate mortgages could help to spur recovery as well.

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