The Federal Reserve and America’s big banks have significantly inflated home prices across the U.S. according to a number of statistics. In many towns across the nation, home sales are facing bidding wars and certain regions are seeing property shortages. One report notes that homebuyers are bidding against “pension funds and Wall Street types,” as investors now represent “20% of U.S. home sales.”
Investors and Deep-Pocket Rivals Are Behind 20% of US Home Sales
Things are looking pretty interesting in the world of U.S. real estate, and in nearly every region in the country home sales are skyrocketing. It’s fascinating, because even though the country has seen massive unemployment numbers and local businesses shut down for well over a year, the housing market is still on fire. Although, things are not the same as they once were during the United States subprime mortgage crisis (2007-2010) that took place over a decade ago.
The reason things are not the same is because today’s banks are far more strict when it comes to getting a mortgage in the U.S., and there’s also a 20% or more down payment required these days. This wasn’t the case during the U.S. subprime mortgage crisis years ago, as that specific economic downfall was blamed on predatory loans given to people with unstable finances. At the time, almost any American could purchase a home with little to no financial background checks, and down payments were not mandated.
That’s not the case anymore, following the Covid-19 outbreak and into 2021’s real estate madness things have changed. Homebuyers must come up with no less than 20% capital for a down payment, and pass the lender’s strict guidelines. Despite these heavier requirements, the Wall Street Journal (WSJ) reports that the U.S. is seeing a “real estate frenzy.” The WSJ’s luxury real estate reporter, Candace Taylor, specifically covers the Rust Belt region in the U.S., but home values are…