According
to a recent report released by Capital Economics, the housing crisis is
expected to end this year. The reason behind this theory is due to banks
finally loosing up their credit standards.
Since the
2008 housing market bubble popped, credit standards have increased leaving many
people with little to no chance of obtaining a loan to buy a home. Before
the crisis began, a potential home owner only needs to obtain a credit
score of mid to upper 500's.
Now, many
economists home that the housing market crisis will come to an end with the
easing of banks’ lending standards and a loosening of credit.
As current
sign of improvement is that the banks are loosening their LTV's
(loan-to-value ratios). A loan-to-value ratio or LTV ratio shows the
amount of a mortgage lien as a percentage of the total appraised value of
the home. For instance, if a borrower takes out a loan of $140,000 to buy
a home worth $160,000, the LTV ratio is $140,000/$160,000 or 87.5%.
Today, banks are showing higher LTV's.
In
addition to that, the employment statistics showed continued growth for the third
straight month in February as employers added 227,000 new jobs for the whole
country. Unemployment rate in Alaska was last reported at 6.9% -
according to the US Federal Reserve. The unemployment rate averaged at 8.0501%
from previous years. The national unemployment average is at 8.3%. This illustrates that the
Alaskan economy is outshining other economies impacted by negative housing
markets.
With the
current job market situation, Americans are beginning to rethink their
attitudes about jumping back to the housing market. With near record low mortgage rates and low
current home prices, now is a good time to both buy and sell. You
can check out www.anchoragehomedeals.com for the
best deals in Alaska.
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