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The US housing market has endured a broad
The US housing market has endured a broad and crippling decline since the peak of 2007 but in recent times pricing has shown signs of stabilizing on the back of the broader economy improving and generous government tax credits having their intended effect on home buyers.
In February of 2009, President Barack Obama signed the economic stimulus plan that included a $8,000 tax credit for first time home owners. The program was initially intended to expire on November 30, 2009 but instead was extended and expanded upon. In the expanded form, existing homeowners who have lived in their home for more than 5 years were also eligible for a $6,500 tax credit on home purchases. The plan expired on April 30, 2010 and the frenzy in the run up is expected to further boost optimism, at least temporarily.
The overall housing market stabilized throughout last year, according to Zillow, a real estate web site, and the S&P Case Shiller Home Price Index. There are a number of reasons, however, why a full blown recovery remains elusive. As well as high unemployment, another chief factor dampening the market is the large supply of homes that are overdue on their mortgage by more than 90 days but have yet to be foreclosed upon, referred to as 'shadow inventory'. As large banks work through their problems the shadow inventory will eventually be foreclosed upon and drip fed onto the market, exerting downward pressure.
Of course, any discussion about housing is an inherently local one. Some regions like Florida, home to Orlando, Jacksonville and Miami continue to struggle and decline. On the other end of the scale, the Pacific Northwest which is home to cities like Seattle and Portland and the Rockies with Denver and Boulder, navigated through the housing crash relatively unscathed and are showing gains year over year.
Read more about the US Housing Market.
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