During the last three months the jobs growth in the US has been
relatively weak, and is likely to slow down the recovery in the
housing market. Recently the unemployment rate increased to 8.2% as
businesses are still failing to hire new workers.
Last month the jobs growth was just 69,000, while at least 400,000
new jobs need to be added to the economy in order for it to be
considered to be on the road to recovery. There are concerns that the
worldwide economy may be slowing, and that they could be more
economic troubles just around the corner, especially with the
continued Eurozone debt crisis.
Historically it's been shown that property transactions usually
lag behind employment gains by at least a year. At the moment
first-time buyers and investors account for around two thirds of all
house purchasers.
Many homeowners are trapped due to lack of equity, or have
negative equity, while those who still have adequate equity are often
reluctant to move due to low home prices. At the moment mortgage
rates are at their lowest level ever, with a recent Freddie Mac
survey showing the fixed rate for a 30 year mortgage was just 3.75%.
It could be that more people will be prompted to take the plunge
during the busy summer selling period, provided they are able to
qualify for a mortgage. At the moment the banks still require very
high credit scores in order to obtain conventional financing.
However government backed schemes such as the FHA require lower
credit scores to qualify. Certain areas of the country, especially
those in the hardest hit regions are already showing significant
signs of improvement. In addition job gains have been reported in
warehousing and transportation, as well as healthcare.
