The recession during the late part of 2008 was mainly because of the housing industry. The subprime lending was the reason of it all, where borrowers with bad credit score will have their second chances. This act has led to the closure of several financial institutions that could no longer afford to lose more due to the losses incurred from borrowers not being able to pay.
Today, the United States government has been pursuing the industry again. It has been helping prop up housing sales by keeping interest rates artificially low and by offering an $8,000 dollar incentive for renters who want to purchase one. According to the Capital Economics in Toronto, the program suggested good results and the government have succeeded in their campaign.
But with or without the incentive, it seems the industry would still likely continue to recover. The housing industry is such a great necessity that no one could forego. So the government is giving up to November 30 for renters to take advantage of the $8,000 tax credit. It was the National Association of Realtors and the National Association of Home Builders who has been working so hard telling that without the incentive, the industry would falter allowing its extension.
Statistically speaking, the campaign has helped about 200,000 first time buyers to finally make their purchase. The figure is about 30% increase in home sales since January of this year. Aside from the campaign, Paul Dales, US economist believes that it was also because to the falling prices of homes. It has reached at a level affordable to everyone plus the relatively low interest rates.
Ergo, although the industry would likely to slow down a bit in the many years to come, it would take some time for it to fully recover at their previous peaks. But nonetheless, everyone must be glad that the word “recover” is already on the air.