How rising house prices are nothing but a disaster?

What does a person rely on for financial stability in the future? If surveys are to be considered, prospective home prices factor in a lot when it comes to a secured future. In some ways, re-evaluating the situation of real estate market in the coming years is crucial. Yes, there are FHA loans in San Jose, but they can’t provide enough relief from the skyrocketing estate values. Remember, the higher the mortgage, the more premium you’d have to repay.

It’s no surprise that the United States is presently suffering from the housing affordability crunch. Only a decline in the value of real estate can resolve that, naturally. Soaring house prices have also attained record levels and are getting in the way of homeownership.

The price surges are hitting young and first time home buyers the worst. With median home prices closing in on the million dollar mark in most metropolitans, it seems logical that only a handful of people will be able to meet the urban housing market demands. This could contribute to a society of winners and losers, and growing wealth disparity. From an industrial standpoint, inflating house prices don’t benefit either. Higher housing costs translate to dwindling living standards, and also endanger geographical movement, leading to labor shortages in housing hotspots like San Jose.

There doesn’t seem to be a silver lining to the current housing market situation. Here are two ways in which increasing house rates can destabilize the United States.

Wealth inequality – While people who already own a house will profit from escalating prices, those who’re aspiring to buy a home will suffer. People who don’t already own a home can either purchase one or live on rent. In both situations, a huge chunk of their proceeds will go into financing the mortgage or paying the rent. Since they’re saving lesser, they’re more likely to suffer greater hardship in their retirement. Contrast that with the savings of people who’ve either inherited property from their family or acquired one while the prices were still moderate.

Lower local economy – Contrary to the popular belief, price inflation doesn’t promote the local economy. Think about it, if a product comes with the value only a few people can afford, it will enjoy a lesser demand in the market. This directly contributes to labor shortages, thus, a lower local productivity.

As a first time home buyer, the best you can do is study the housing market and secure the mortgage with lowest interest rates in San Jose. Even though an affordable mortgage won’t be able to beat the inflation, but it will keep your future stable.

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Created on Mar 14th 2018 02:38. Viewed 333 times.

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