Housing on credit in the USA

Housing on credit in the USA

Such low interest rates, of course, stimulate the entire construction industry market. Real estate sales are growing above analysts' forecasts, although demand for residential real estate still remains at a relatively low level. Also read why it is profitable to buy property in the UK.

Most Americans still remember the economic crisis of 2008 and are in no hurry to go into debt. Let us recall that it was precisely because of the inability to repay debts on mortgage loans that such “monsters” of the credit and financial sector of the American economy as Merrill Lynch, J.P. Morgan and a number of others began to collapse. And the bankruptcy of credit institutions, of course, began a series of falls of insurance companies that insured mortgage loans.

Housing on credit in the USAHousing on credit in the USAphoto: evroportal.ru

What can we say if the world's largest insurance company AIG went bankrupt. But North America is struggling with this trend, because it understands that real estate sales are an extremely important sector of the economy, since as soon as this industry begins to collapse, it pulls with it all the accompanying ones: it stops production and sale of concrete, rolled metal, non-metallic building materials, reinforced concrete — these are only those materials that are related to capital construction.

And how many more finishing materials, how much does construction equipment cost without work, are being cut, or hundreds of thousands (if not millions) of people are temporarily left without work. And off we go: people don’t have money, they stop consuming, that is, buying everyday goods, food, cars, computer equipment, and everything else. And this, in turn, means that the retail industry is beginning to decline. As retail begins to sell less, those who produce what retail sells begin to produce less, and so on, ad infinitum.

Housing on credit in the USAHousing on credit in the USAphoto: usaprosto. ru

That is why the US financial authorities understand very well how and where this chain can end, and that from being a first world power one can very easily become lagging behind China and a number of other Asian countries. And since demand for real estate is not as good as we would like, there is a high probability that mortgage rates in the United States will continue to decline at another record pace. And therefore, the American real estate market will become an even more popular investment tool.

And first of all, this concerns not ordinary American citizens, but investors who, in bad times, buy everything cheaper, and when countries begin to “recover” from the crisis, they sell everything at a much higher price , of course, making good money on it. Thus, the US authorities support not only their citizens, creating conditions for them to purchase housing on preferential terms, but also creating attractive economic conditions for the development of the entire construction industry, including the development of the entire construction materials sector: non-metallic materials (sand, crushed stone, granite, etc.), ready-mixed concrete, metal, etc.