The housing sector is playing a starring role in the nation’s economic recovery. But how exactly does housing work its magic on the U.S. economy? As Min Zhu, Deputy Managing Director of the International Monetary Fund explains, most personal wealth in the United States is tied up in residential real estate. When homeowners have equity in their properties and feel good about the direction of the housing market, their level of spending on a wide variety of products and services tends to increase. That spending has a strong multiplier effect, helping fuel the country’s economic recovery. Says Zhu: “A well-functioning housing sector is critical to the overall health of the economy.”
The national negative equity rate — measuring homeowners who have no equity and owe more on their homes than they were worth — continues to shrink. It’s now at about 17 percent, according to Zillow.com, down significantly from 31.4 percent in the first quarter of 2012.
Home purchases also have a significant impact on the nation’s economy as well. Did you know that building permits have reached a nearly 6 1/2 year high? Whether purchasing new or existing homes, home buyers also often purchase a host of consumer goods and services, including furniture, window coverings, landscaping, kitchenware and more. An improving housing market affects so many other industry sectors!
A key component in all of this good news is the mortgage lending sector. Our industry has been able to provide consumers with a once-in-a-generation opportunity to lock in historically low financing rates. And consumers continue to respond. Strong demand for mortgage loans, both for purchasing and refinancing, are evident in Security National Financial Corporation’s third quarter financial results. Revenue from the mortgage segment has nearly doubled from last year.
The mortgage industry’s contribution to our growing economy benefits both citizens looking to invest in a home and our country as a whole. Here’s to an even better 2015!