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US housing market and its performance in 2012

Though the storms with regards to the housing market has still not cleared out and though the sky is full of storm clouds till now, a few silver linings have started to break out from the clouds. That is what most of the economists have to say. According to a recent report, though the median home prices are going to face a 3.9 percent drop; on an average, it is supposed that there is going to be a rise in the home values in dozens of localities in US. Still, it is surmised that the mortgage market in general is not supposed to see any significant development in this year.

Debates on the housing market

There have been various debates on the housing market. Some are of the view that the housing market is going to see some positive growth in 2012. While some others still believe that there aren’t going to be any significant change in the housing market.

There are many economists who doubt that there is going to be any forms of growth that is going to be robust enough so as to spark any significant rebounds within this profoundly depressed housing market. The real estate sector seems to be almost unable to do anything progressive rather than simultaneously taking one step forward and backward. Therefore, this is ultimately resulting into nothing significant.

For example, according to a report by the National Association of Realtors, the number of people who had signed contracts with regards to buying homes, had increased in the month of November, 2011. But similarly, there was also a surge in the number of contracts that had got cancelled at the same time.

According to the assessment of Lance Roberts, CEO and chief strategist of Streettalk Advisors, the struggle of the real estate is not only going to continue into 2012 but this will rather spill over into the following years too. Many are also of the view that the low interest rates are going to continue into 2012 and beyond that too. Now, these factors on the contrary are also going to help the US economy growing at least by some limits. Moreover, on a general basis, the growth momentum have picked up by some points.

Yet, some of the economists still believe that 2012 too will be a tough year. One reason is the congressional dysfunction which is going to happen mainly due to the presidential elections later in the year. Some of the economists are also of the view that this year there may also be some serious political crisis.

Another reason that may have a negative effect on US economy yet again and thus the housing market too; just as the effect on any other financial markets; is the slowed growth of the Chinese economy. Previously, the annual growth rate of China was around 10 percent and this has been helping a lot to prop up the global economy. However, as per the recent changes, the housing sector of China is looking increasingly troubled. This is threatening a continual expansion of the US housing market too.

So, here are some of the views based on which the mortgage and the housing market is going to perform in US this year.

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