The U.S. housing market is like a case of good cop/bad cop.
The good cop softens you up with record-low mortgage rates and a huge supply of available houses.
The bad cops — risk-averse lenders — have tightened their loans and require bigger down payments along with stellar credit.
This push-pull scenario is likely to continue in 2012, say U.S. housing experts.
The National Association of Realtors forecasts a rise in home sales of 5 percent, to 4.5 million in 2012, but at the same time, “[growth] is a slow, gradual process. It’s been frustrating,” says Walter Molony, National Association of Realtors spokesman.
“It’s tough to get a mortgage. People have to pay attention to their credit scores.”
In December, the Wall Street Journal reported that a number of hedge funds, including Caxton Associates LP, SAC Capital Advisors LP and Blackstone Group LP, have been investing in the housing market. If you’re in the market for a house, why wouldn’t you want to buy one at a bargain price?
Housing markets with strong local economic conditions and job creation are generally doing better. The 10 best performing states are North Dakota, Wyoming, Minnesota, Alaska, Nebraska, Utah, Virginia, Colorado, Kansas and New Hampshire, based on LendingTree’s State Recovery Index from December that looks at six elements influencing the housing market, such as unemployment and home/rental vacancies.
For cities, a Clear Capital report released last week predicts the five best-performing metro areas will be Orlando and Miami in Florida; Bakersfield, Calif.; Washington, D.C.; and Phoenix, Ariz.
