Average Home Prices Have Increased: What This Means for the U.S.
Usually, unemployed people and those in tough financial situations feel the increase in the overall house price in the United States. According to recent statistics, average home prices increased a staggering 1.3% in April in 20 major markets, which was the first such increase in 7 months.
The weak and slow economic growth in the US was attributed, in part, to the abrupt changes witnessed in the housing market (although the economy also negatively impacted this as well). However, with economic recovery, the housing market also began to recover, but it came crashing down in April with these startling housing figures.
The weakening of the economy will affect the gains that the housing market has achieved over the years; subsequently, this might reduce the cost of houses. In this case, it means that the future of the US economy remains unpredictable, which affects all American, but specifically the middle class. A troubled housing sector permeates into many other socioeconomic spheres of society, including lack of confidence in the market and thereby lack of investment; people losing more on selling their homes; not being able to afford reasonable housing; increasing the homeless population in the US; etc.
Low investment in real estate translates to the shortage of housing facilities in the future, and therefore will probably create an increased demand in the housing market. With an increased demand comes to the need for people to seek out loans and other financial assistance to help them through, and if we end up borrowing more from the banks we might end up in the same situation that got us here in the first place.
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