The economic news for the housing market remains positive with the latest figures showing continued growth. However, the speed of the growth is decelerating. The United States collect figures across 20 major metropolitan cities. the prices on these indexes went up 12% in July when compared with period of 12 months ago. This represents the greatest level of growth since the collapse of the housing market over seven years ago. The hidden insight in the data is that mortgage rates have begun to influence the rate of housing price growth. Metropolitan areas from which statistics are collected have consistently recorded increases in average housing price for more than a quarter now.
The probable cause of the slowing of growth in the housing market is the beginning of a rise in interest rates in the mortgage market. the so-called quantitative easing program established by the United States merger reserve is expected to come to an end which will raise the cost of borrowing and therefore slow down the rate of the sales growth. This was despite an announcement from the central bank that the program of quantitative easing would continue beyond the short-term because of worries about slowing economic growth. Because it is impossible to lock in an interest-rate for a home which is under construction. This means that the market is also searching for existing structures which have been owned by a previous owner.
The major regions seeing growth in the housing market are in the southern and western areas of United States. Some of the growth states include Arizona, Nevada, California, Texas and New Mexico. One explanation for this is that there are large immigrant populations in these areas and this is leading to a boom in housing construction because of the need to house largely populations which are moving into the southern and western states where there is still the land available for development. For example, in California recent economic ties suggests that there is been tech industry related growth in the economy as well is a recovery in the aerospace related industries in California. Another state which is benefiting from economic recovery is Nevada which is also experiencing a construction boom related to growth in the entertainment industry.
Comparatively, some of the states which are not experiencing significant growth in the northern and eastern parts of the country. perhaps unsurprisingly, an example of housing market which is distinctly stagnant to pay the national average is that of Detroit Michigan. Recently, the municipal council of Detroit became bankrupt and this is indicative of depressed economic conditions in the city which is related to lower housing prices. However, this malaise is not limited to Detroit with cities such as Chicago, Boston, Philadelphia and other parts of the north-east area of the country not matching the level of growth in the south-west. For this reason it seems to be a good time to be moving towards the south-west part of the country where economic growth is continuing and house prices continue to go up.