Optimistic 2012 For Real Estate Market

        With tight mortgage conditions and struggling sales for new homes we are left with a large demand and interesting opportunities. Consumer prices decreased in October which means low wage workers and others struggling will find more affordability in the market. With this decline, the Federal Reserve has more flexibility when creating and executing fiscal policies to help stimulate the economy. The National Association of Realtors (NAR) predicts that 2012 will be one of the best years on record for housing affordability. Lawrence Yun states  ”[h]ousing affordability conditions, based on the relationship between median home prices, mortgage interest rates, and median family income, have been at a record high this year” (Carla Hill).These favorable affordable conditions will dominate next year and most likely will be the second best year on record since 1970. Hopefully credit restrictions will continue to loosen which will allow buyers to take advantage of these great opportunities. Even though lower loan limits could restrict liquidity in the mortgage markets, existing home sales are forecasted to increase 4-5% in the new year. Mortgage rates are expected to be at a record low and the Federal Reserve is committed to keep them low through 2013. With these low rates, homeowners have the opportunity to refinance and therefore reinvest savings into home improvements. The housing market and economy have struggled for the past two and a half years but recent stats and predictions forecast a very optimistic 2012.